The planning of a digital radio network requires an evaluation of the effect of quite a large number of interfering sources. These in turn are dependent upon many parameters, such as the network structure, channel arrangement, antenna patterns, and so on. This paper presents a performance analysis of a digital radio-relay system during fading periods. The possibility of attaining a required fading margin is analyzed when many co-channel and interchannel interferences are simultaneously present, both for long-haul and shorthaul radio relay systems. A comparison is presented between two possible techniques for the reusing of the same frequency band in each hop, by taking advantage of the cross-polarization discrimination (XPD). The reduction of the XPD expected during fading periods is also taken into account. Binary and quaternary coherent PSK modulations are considered, with realizable filters (of the Butterworth type), both at the transmitter and at the receiver. The error probability calculations were performed with a combined analytical and computer simulation approach. The results seem to indicate the feasibility of the frequency reuse technique.