The invention provides a system that implements an algorithm for integrated link adaptation and power control to achieve specified error rates and to improve an overall throughput for real-time applications in wireless packet networks. The system initially divides wireless terminals into groups according to their signal path gains. Afterwards, the system can periodically adapt transmissions (i.e., link adaptations) based on the required error rates, actual error statistics and average transmission power for each wireless terminal group. Furthermore, transmission power can be adjusted by an enhanced Kalman-filter method to ensure successful reception.