  In this paper, we present a distributed estimation setup where local agents
estimate their states from relative measurements received from their
neighbours. In the case of heterogeneous multi-agent systems, where only
relative measurements are available, this is of high relevance. The objective
is to improve the scalability of the existing distributed estimation algorithms
by restricting the agents to estimating only their local states and those of
immediate neighbours. The presented estimation algorithm also guarantees robust
performance against model and measurement disturbances. It is shown that it can
be integrated into output synchronization algorithms.
