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Because of the all-weather and all-time data acquisition capability, high resolution space borne synthetic aperture radar (SAR) plays an important role in remote sensing applications like earth mapping. However, the visual interpretation of SAR images is usually difficult, especially for urban areas. This paper shows a method for visual interpreting SAR images by means of optical and SAR images simulated from digital elevation models (DEM), which are derived from LiDAR data. The simulated images are automatically geocoded and enable a direct comparison with the real SAR image. An application for the simulation concept is presented for the city center of Munich where the comparison to the TerraSAR-X data shows good similarity. The simulated optical image can be used for direct and quick identification of objects in the corresponding SAR image. Additionally, simulated SAR image can separate multiple reflections mixed in the real SAR image, thus enabling easier interpretation of an urban scene.