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A method for fusing Synthetic Aperture Radar (SAR) images with optical aerial images is presented. This is done in a navigation framework, where the absolute position and orientation of the flying platform is estimated based on the aerial image coordinates taken as ground truth. The method is suitable for new low-price SAR systems for small unmanned vehicles. The primary application is remote sensing, where the SAR image provides one further “colour” channel revealing reflectivity to radio waves. It is also useful for off-line correction of the flight trajectory. The method is based on first applying an edge detection algorithm to the images and then optimising the most important navigation states by matching the two binary images. To get a measure of the estimation uncertainty, we embed the optimisation in a least squares framework, where an explicit method to estimate the (relative) size of the errors is presented. The performance is demonstrated on real SAR and aerial images, leading to an error of only a few pixels.