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The problem of communication among nodes in an extended network is considered, where radio power decay and interference are limiting factors. It has been shown previously that, with simple multi-hopping, the achievable total communication rate in such a network is at most Theta(radic(N)). In this work, we study the benefit of node cooperation in conjunction with multi-hopping on the network capacity. We propose a multi-phase communication scheme, combining distributed MIMO transmission with multi-hop forwarding among clusters of nodes. We derive the network throughput of this communication scheme and determine the optimal cluster size. This provides a constructive lower bound on the network capacity. We first show that in regular networks a rate of omega(N2/3) can be achieved with transmission power scaling of Theta(Nalpha/6-1/3), where alpha > 2 is the signal path-loss exponent. We further extend this result to random networks, where we show a rate of omega(N2/3 (logN) 2-alpha/6 ) can be achieved with transmission power scaling of Theta(Nalpha/6-1/3 (logN) (alpha-2) 2 /6. In particular, as alpha approaches 2, only constant transmission power is required.