Effective monitoring and management applications on modern distribution networks require a sound network model and the knowledge of line parameters. Network line impedances are used, among other things, for state estimation and protection relay setting. Phasor Measurement Units (PMUs) give synchronized voltage and current phasor measurements, referred to a common time reference (coordinated universal time). All synchrophasor measurements can thus be temporally aligned and coordinated across the network. This feature, along with high accuracy and reporting rates, could make PMUs useful for the evaluation of network parameters. However, instrument transformer behavior strongly affects parameter estimation accuracy. In this paper, a new PMU-based iterative line parameter estimation algorithm for distribution networks, which includes in the estimation model systematic measurement errors, is presented. This method exploits the simultaneous measurements given by PMUs on different nodes and branches of the network. A complete analysis of uncertainty sources is also performed, allowing the evaluation of estimation uncertainty. Issues related to operating conditions, topology and measurement uncertainty are thoroughly discussed and referenced to a realistic model of a distribution network to show how a full network estimator is possible.