Laser designation uses a pulsed laser which contains a specific code the bullet/bomb/missile locks itself to and tracks from its point of release.
A number of atmospheric conditions can effect the ability to track this signal, primarily cloud cover, rain, smog, dust and for whatever reason, RF/EM in high quantity. Sort of a running joke was to blame all of our problems on RF, but seriously fuck RF. Baghdad was the worst though, not getting into specifics but they had huge power substations along the Tigris and it fucked all sorts of weird shit up.
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