A method and system for diagnosing any combination of persistent and intermittent faults. The behavior of a system under test is obtained by measuring or probing the system at a particular location(s). The predicted behavior of a modeled system corresponding to the system under test is investigated by drawing inferences based on at least conditional probabilities, prior observations and component models. The predictions are compared to their corresponding points in the system under test. A determination is made if a conflict exists between the measured behavior and the predicted behavior, and the conditional probabilities are adjusted to more and more accurately reflect the action fault(s) in the system under test. The conflicts or deviations between the obtained predicted behavior and the actual behavior are used to isolate the components of the system causing the faults.
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