IEEE 802.16 is an emerging technology for broadband cellular wireless communications. In the context of high capacity systems for mobile terminals, implementation issues like channel estimation become more challenging because of the sparsity of the pilots grid (w.r.t. the channel coherence bandwidth) and the time varying nature of the channel. This paper proposes a novel algorithm for channel estimation that is characterized by a good trade-off between complexity and performance. The algorithm, that is suitable for pilot-aided OFDM transmission, is applied here to IEEE 802.16e systems. Numerical results show that a meaningful performance gain (in terms of mean squared error and error probability) is provided by this estimation procedure, especially in the low SNR (Signal to Noise Ratio) region.