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Vehicular Ad hoc Network (VANET) is a challenging network environment in which communication between vehicles in highly fading environments, like an urban scenario, is unpredictable and difficult. In order to analyze the performance of protocols and applications, network simulators like NS-2 use deterministic two ray ground radio propagation model. This model, however, poorly reflects the channel characteristics of real world conditions. In this paper, probabilistic Nakagami radio propagation model is used to represent channel fading characteristics of urban scenarios. The performance analysis of two routing protocols, AODV and OLSR using Nakagami propagation model under high obstacle urban environment is presented. It is observed that both routing protocols fail to provide acceptable packet delivery ratio. Overall, OLSR, with short interval of control messages, performed better than AODV in urban environments.