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Many operations, be they military, police, rescue, or other field operations, require localization services and online situation awareness to make them effective. Questions such as how many people are inside a building and their locations are essential. In this paper, an online localization and situation awareness system is presented, called Mobile Urban Situation Awareness System (MUSAS), for gathering and maintaining localization information, to form a common operational picture. The MUSAS provides multiple localization services, as well as visualization of other sensor data, in a common frame of reference. The information and common operational picture of the system is conveyed to all parties involved in the operation, the field team, and people in the command post. In this paper, a general system architecture for enabling localization based situation awareness is designed and the MUSAS system solution is presented. The developed subsystem components and forming of the common operational picture are summarized, and the future potential of the system for various scenarios is discussed. In the demonstration, the MUSAS is deployed to an unknown building, in an ad hoc fashion, to provide situation awareness in an urban indoor military operation.