A rail break or rail vehicle detection system which includes a voltage source, capable of voltage source compensation, is coupled to each of a plurality of zones within a block of rail track devoid of insulated joints. A plurality of current sensors are provided, each coupled to a respective voltage source and configured to measure current flowing through the sensor in response to changing voltage patterns. Each current sensor is further configured in one embodiment to determine and compare signatures based on current measurements to a predetermined decision surface to detect the presence of a rail vehicle or rail break on a predetermined block of track. The voltage source or current sensor can be adapted to control voltage levels and polarity of each voltage source. A method of communicating the presence or absence of a rail break or rail vehicle employs an in-rail TDMA communication scheme to synchronize, test and communicate directly between the sensors without use of external controllers.