A method and an optical receiver compensates for an error in a phase of an optical signal in a receiver. The signal includes blocks of symbols in a sequence. Each block is decoded based on a partially phase compensated symbols, and an average phase error for the block is estimated. Forward phase compensation and backward phase compensation is performed on the block based on the average phase error, and the decoding, estimating, performing is iterated until a termination condition is satisfied to produce a phase compensated block.