When lidar pulses travel through a short path that includes a relatively high concentration of aerosols, scattering phenomena can alter the power and temporal properties of the pulses significantly, causing undesirable effects in the received pulse. In many applications the design of the lidar transmitter and receiver must consider adverse environmental aerosol conditions to ensure the desired performance. We present an analytical model of lidar system operation when the optical path includes aerosols for use in support of instrument design, simulations, and system evaluation. The model considers an optical path terminated with a solid object, although it can also be applied, with minor modifications, to cases where the expected backscatter occurs from nonsolid objects. The optical path aerosols are characterized by their attenuation and backscatter coefficients derived by the Mie theory from the concentration and particle size distribution of the aerosol. Other inputs include the lidar system parameters and instrument response function, and the model output is the time-resolved received pulse. The model is demonstrated and experimentally validated with military fog oil smoke for short ranges (several meters). The results are obtained with a lidar system operating at a wavelength of $0.905\mathrm{\mu m}$ within and outside the aerosol. The model goodness of fit is evaluated using the statistical coefficient of determination whose value ranged from 0.88 to 0.99 in this study.