Iterative localization is arising as a promising solution to determine the position of a mobile station in a cellular network. We recently showed that in a perfect lineof-sight environment, iterating between the conventional delay estimation and multi-lateration steps allows to approach the performance of the direct localization based on the observation of the received signals. In this paper we extend our iterative localization method to operate in rich multipath environments. Simulation results prove that given some prior knowledge on the power delay profile of the channel, the proposed iterative algorithm is robust to harsh propagation environments and performs very close to the direct localization approach.