Horizon-based optical navigation (OPNAV) is an attractive solution for deep space exploration missions, with strong autonomy and high accuracy. In some scenarios, especially those with large variations in spacecraft distance from celestial bodies, the visible horizon arc could be very short. In this case, the traditional Christian–Robinson algorithm with least-squares (LS) estimation is inappropriate and would introduce a large mean residual that can be even larger than the standard deviation (STD). To solve this problem, a simplified measurement covariance model was proposed by analyzing the propagation of measurement errors. Then, an unbiased solution with the element-wise total least-squares (EW-TLS) algorithm was developed in which the measurement equation and the covariance of each measurement are fully considered. To further simplify this problem, an approximate generalized total least-squares algorithm (AG-TLS) was then proposed, which achieves a non-iterative solution by using approximate measurement covariances. The covariance analysis and numerical simulations show that the proposed algorithms have impressive advantages in the short-arc horizon scenario, for the mean residuals are always close to zero. Compared with the EW-TLS algorithm, the AG-TLS algorithm trades a negligible accuracy loss for a huge reduction in execution time and achieves a computing speed comparable to the traditional algorithm. Furthermore, a simulated navigation scenario reveals that a short-arc horizon can provide reliable position estimates for planetary exploration missions.