This annual report summaries the activities and the results from the project "Modeling of target and background in the radar region" from 2007. The activities have been divided into a modeling- and a measurement part. Within the modeling part, studies and developments of a new calculation method, "The Potential Method", have been conducted. Studies of the "Iterative Physical Optics Method" have also been performed. Common for those two methods are that they can be used to calculate the RCS for relatively large objects. The results are encouraging and the studies will proceed in 2008. Furthermore, a sea state model has been developed to be used for radar signature calculations for maritime scenarios. In addition, new functionality has been tested in the SE-RAY-EM (former SPECRAY EM) program. The activities within the measurement part have been to test and develop different and complementary calibration methods. The purpose is to be able to make short range bistatic measurements on different types of backgrounds. The results shown that an implementation of the suggested calibration- and characterization methods - which is a relatively easy measure - will enhance the measurement quality.