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In order to ensure the data rate, ship detection within short coherent integration time (CIT) is an operational requirement for over-the-horizon radar (OTHR). However, the resulting low Doppler resolution of short CIT brings difficulties in discrimination of the ship target peak and the powerful ocean clutter. To solve this problem, high resolution spectrum estimation techniques have been used to replace the conventional Fast Fourier Transform (FFT) for Doppler spectrum analysis. In this paper, a new spectrum estimation algorithm is proposed for ship detection by OTHR, which has higher Doppler resolution compared with the conventional method. In addition, in case that the signal-to-noise ratio (SNR) is low or the Doppler frequency of the target is close to that of the first-order ocean clutter Bragg peak, the presented algorithm can still effectively be used for ship detection for OTHR. The superiority of the proposed algorithm is illustrated by simulated OTHR data.