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The positioning methods based on received signal strength (RSS) measurements, link the RSS values to the position of the mobile station(MS) to be located. Their accuracy depends on the suitability of the propagation models used for the actual propagation conditions. In indoor wireless networks, these propagation conditions are very difficult to predict due to the unwieldy and dynamic nature of the RSS. In this paper, we present a novel method which dynamically estimates the propagation models that best fit the propagation environments, by using only RSS measurements obtained in real time. This method is based on maximizing compatibility of the MS to access points (AP) distance estimates. Once the propagation models are estimated in real time, it is possible to accurately determine the distance between the MS and each AP. By means of these distance estimates, the location of the MS can be obtained by trilateration. The method proposed coupled with simulations and measurements in a real indoor environment, demonstrates its feasibility and suitability, since it outperforms conventional RSS-based indoor location methods without using any radio map information nor a calibration stage.