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In this study, the authors investigate the effect of co-channel interference on the performance of dual-hop communications with amplify-and-forward relaying. First, the exact equivalent signal-to-interference-plus-noise ratio (SINR) at the destination is formulated and upper bounded. Then, the cumulative distribution function, probability density function (PDF) and moment generating function of the upper bounded SINR are determined. Further, expressions for the error and the outage probabilities are obtained. Moreover, an approximate PDF of the dual-hop link's instantaneous SINR is derived. In particular, simple expressions for the error and outage probabilities are presented and discussed. Numerical and simulation results are provided and confirm the tightness of the presented asymptotic expressions. Besides, optimisation of the power allocation and relay positioning are addressed. Specifically, the authors study adaptive power allocation with fixed relay location, optimal relay location with fixed power allocation, and joint optimisation of the power allocation and relay location under total transmit power constraint, in order to minimise the asymptotic average error probability and outage probability. Results show that optimum power allocation, optimum relay location and joint optimisation significantly improve the system performance in terms of error and outage probabilities compared to uniform power allocation and mid-point distance location of the relay node.