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In this paper, we propose a new maximum-likelihood (ML) target localization approach which uses quantized sensor data as well as wireless channel statistics in a wireless sensor network. The novelty of our approach comes from the fact that statistics of imperfect wireless channels between sensors and the fusion center along with some physical layer design parameters are incorporated in the localization algorithm. We call this approach ldquochannel-aware target localization.rdquo ML target location estimators are derived for different wireless channel models and receiver architectures. Furthermore, we derive the Cramer-Rao lower bounds (CRLBs) for our proposed channel-aware ML location estimators. Simulation results are presented to show that the performance of the channel-aware ML location estimators are quite close to their theoretical performance bounds even with relatively small number of sensors and their performance is superior compared to that of the channel-unaware ML estimators.