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With the increasing number senior citizens, E-health is targeted for home use with the special requirements of being usable in everyday life and low cost. A wireless sensor network application is proposed here for 24 hour constant monitoring without disturbing daily activities of elderly people and their caretakers. In the system proposed, both fixed and body (mobile) sensors are used. Since not every elder likes to have a sensor board attached to him/her, and in many cases, he/she may not carry the sensor; the home sensor network independently would have the ability to monitor the health status and living environment based on the multisensor data analysis and fusion. A mixed positioning algorithm is proposed to determine where the elderly person is. The purpose of the positioning is to help the system to determine the person's activities and further to make decisions about his/her health status. The system could take care of two types of the basic needs of an elderly person: everyday needs as abnormal events and emergency alarms to doctors and caretakers through telephone, SMS and e-mail, and day to day requirements such as taking of medicine, having lunch, turn off the microwave oven, and so on. At same time, the system is sensitive to security and privacy issues.