A finite element dynamic-thermodynamic sea-ice model has been coupled to the FiniteElement Ocean Model (FEOM). As a first step, the coupled model (now the Finite ElementSea Ice - Ocean Model, FESOM) has been configured in a circumpolar domaincovering the Southern Ocean between the coast of Antarctica and 48S using an almostregular grid with about 180 000 nodes. Simulations have been performed for idealizedtest cases and for realistic daily atmospheric forcing. Ice concentration datasetsderived from the SSM/I passive microwave sensor, ice thickness information derivedfrom upward looking sonars (ULS) and the ASPeCt dataset, and oceanographic atlasdata have been used to validate the model. The coupled model yields stable integrationsfor many decades and gives very reasonable results. The FEOM code has beenextensively revised to achieve a better computational performance. Using this newcode, the model is now set up on a global grid with a horizontal resolution focussed onthe Southern Ocean and particularly on the Antarctic continental shelves and slopes.This model setup will be used to adress questions related to decadal variability in highlatitudes and to the role of the Southern Ocean in the global thermohaline circulationand in possible future climate change. In the framework of a project related tothe GRACE mission that aims at a more accurate description of the geoid, an analysisof bottom pressure anomalies and circulation in the South Atlantic is performed.Here, the grid will be further refined to establish an eddy-resolving area in part of theAtlantic sector of the Antarctic Circumpolar Current (ACC). Furthermore, the SingleEvolutive Interpolated Kalman Filter (SEIK) is currently being implemented to allowfor the assimilation of sea ice data in the coupled model.