A novel iterative channel estimation approach is proposed for cyclic prefix-code division multiple access systems. Code-multiplexed pilots are used for channel estimation while maintaining bandwidth efficiency. The proposed method achieves a significant improvement when compared to the conventional correlation approach by reconstructing data signals for channel estimation. Simulation results demonstrate good estimation capability with an allocation of only 10% of the whole power to the pilot channel. In addition, an integrated channel estimator and parallel interference cancellation (PIC) detector are proposed. Data signals are reconstructed for channel estimation while the interference contributed by different data channels as well as the pilot channel are regenerated and subtracted from the received signal at the final stage. The channel estimation error reduces at each iteration and the PIC at the last stage enables further bit error rate performance improvement to be achieved for the system. The performance of the proposed scheme is studied through simulations and results verify its effectiveness.