I have a terrain model in the form of a GEOTIFF raster which is from the SRTM (Shuttle Radar Technology Mission) data.
Can this raster data be converted / imported into blender into a triangular mesh?
Can 3D city modelling be done, over this mesh?
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Blender can use tiff images, not sure if geotiff works to but it should work too. Otherwise you had to convert the geotiff to a png or jpg first.
Add a plane (same aspect ratio like your image). Go to the modifier tab and add a Subdivision Surface modifier. Set it to Simple. Add 3 or 4 subdivisions and apply the modifier. Add again a Subdivision Surface modifier to control the resolution of your mesh later.
Next add a Displace modifier and add a new Image or Movie texture there. With the rightmost icon you can switch over to the texture tab, load your image and give your texture a name etc.
Back in the modifier tab you can play with the values a bit (Strenght 0.2 for example).
You could add the Decimate modifier to simplify your geometry - just play with the values, Collapse mode should give good results for terrain models.
Here I found a tutorial wich covers also the geotiff conversion (under "Create Heightmap") http://www.navimationresearch.net/2013/norway-in-3d-part-1/ sorry link is dead now.
I think you're looking for a set of Blender addons called BlenderGIS.
See the BlenderGIS Wiki for a full feature list, but the suite author seems to be focused on accuracy and the tools are able to handle arbitrary rasters, DEM and other point cloud data, Delaunay/voronoi triangulation from a variety of sources, and has tools to assist building geometry accurately from topo maps. I haven't used it much, but the documentation is thorough enough, being a work in progress. It has been developed for over 2 years, by one person and is still actively maintained. Perhaps you can lend a hand with the project?