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This paper presents a novel bilateral teleoperation algorithm for n degree of freedom nonlinear manipulators connected through communication networks with time delays. Central to this approach is the use of second order sliding mode unknown input observers for estimating the external forces acting on the manipulators. The use of these observers removes the need for both velocity and force sensors, leading to a lower cost hardware setup that provides all of the advantages of a position-force teleoperation algorithm. A proof of stability for each of the master and slave manipulators and their associated observers and controllers is given, as well as stability results for the entire closed loop in the presence of time delays. Experimental results are presented, confirming the validity of this approach in practice.