A method to improve the reliability of data transmission between two terminals without using multiple antennas is cooperative communication, where spatial diversity is introduced by the presence of a relay terminal. The Quantize and Forward (QF) protocol is suitable to implement in resource constraint relays, because of its low complexity. In prior studies of the QF protocol, all channel parameters are assumed to be perfectly known at the destination, while in reality these need to be estimated. This paper proposes a novel quantization scheme, in which the relay compensates for the rotation caused by the source-relay channel, before quantizing the phase of the received M-PSK data symbols. In doing so, channel estimation at the destination is greatly simplified, without significantly increasing the complexity of the relay terminals. Further, the destination applies the expectation maximization (EM) algorithm to improve the estimates of the source-destination and relay-destination channels. The resulting performance is shown to be close to that of a system with known channel parameters.