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In this paper pilot based channel estimation technique with frequency offset correction for OFDM space-time diversity system is proposed. It is shown that the considered system becomes useless for the frequency offset of 0.3% of the subcarrier spacing, if frequency offset correction is not performed. With the proposed estimation technique, the system tolerance to the frequency offset is significantly improved. Thus, frequency offset of 10% of the subcarrier spacing has the same effect as 2 dB signal-to-noise ratio (SNR) degradation and it can be tolerated.