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A study of the effect of cochannel interference on the performance of multihop wireless networks with amplify-and-forward (AF) relaying is presented. Considering that transmissions are performed over Rayleigh fading channels, first, the exact end-to-end signal-to-interference-plus-noise ratio (SINR) of the communication system is formulated and upper bounded. Then, the cumulative distribution function (cdf) and probability density function (pdf) of the upper bounded end-to-end SINR are determined. Based on those results, closed-form expression for the error probability is obtained. Furthermore, an approximate expression for the pdf of the instantaneous end-to-end SINR is derived, and based on this, a simple and general asymptotic expression for the error probability is presented and discussed. In addition, the ergodic capacity of multihop wireless networks in the presence of external interference is studied. Moreover, analytical comparisons between AF and decode-and-forward (DP) multihop in terms of error probability and ergodic capacity are presented. Finally, optimization of the power allocation at the network's transmit nodes and the positioning of the relays are addressed.