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We apply the density-evolution technique to determine the thresholds of low-density parity-check (LDPC) codes when the sum-product algorithm is employed to perform joint channel-state estimation and decoding. The channel considered is the two-state noiseless/useless binary symmetric channel (BSC) block interference channel, where a block of h consecutive symbols shares the same channel state, which is either a noiseless BSC (crossover probability 0) or a useless BSC (crossover probability 1/2). The channel state is selected independently and at random from block to block, according to a known prior distribution. The threshold of the joint channel-state estimation/decoding scheme when used over such a channel is shown to be greatly superior to that of a decoder that makes no attempt to estimate the channel state. These results are also confirmed by simulation. The maximum-likelihood (ML) performance of LDPC codes when used over this channel is investigated. Lower bounds on the error exponents of regular LDPC codes, when ML decoded, are shown to be close to the random coding channel error exponent when the LDPC variable node degree is high.