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The problem of key generation over wireless fading channels is investigated. First, a joint source-channel approach that combines existing source and channel models for key agreement over wireless fading channels is developed. It is shown that, in general, to fully exploit the resources provided by time-varying channel gains, one needs to combine both the channel model, in which Alice sends a key to Bob over a wireless channel, and the source model, in which Alice and Bob generate a key by exploiting the correlated observations obtained from the wireless fading channel. Asymptotic analyses suggest that in the long coherence time regime, the channel model is asymptotically optimal. On the other hand, in the high power regime, the source model is asymptotically optimal. Second, the framework is extended to the scenario with an active attacker. Assuming that the goal of the attacker is to minimize the key rate that can be generated using the proposed protocol and the attacker will employ such an attack strategy, the attacker's optimal attack strategy is identified and the key rate under this attack model is characterized.