Apparatus for determining the position of a selected object relative to a moving reference frame, the apparatus including at least one reference frame transceiver assembly firmly attached to the moving reference frame, at least one object transceiver assembly firmly attached to the selected object, an inertial measurement unit firmly attached to the selected object, an inertial navigation system firmly attached to the moving reference frame, and a tracking processor coupled with the object transceiver assembly, with the inertial measurement unit and with the inertial navigation system, the object transceiver assembly communicating with the reference frame transceiver assembly using magnetic fields, the inertial measurement unit producing IMU inertial measurements of motion of the selected object with respect to an inertially fixed reference frame, the inertial navigation system producing INS inertial measurements of motion of the moving reference frame with respect to the inertially fixed reference frame, the tracking processor receiving electromagnetic measurements resulting from the magnetic communication between the reference frame transceiver assembly and the object transceiver assembly, the tracking processor determining the position of the selected object relative to the moving reference frame by using the IMU inertial measurements and the INS inertial measurements to optimize the electromagnetic measurements.