1Institute for Solid State Physics and Optics, Wigner Research Centre for Physics, P.O. Box 49, Budapest H-1525, HungaryMagnetoresistance and magnetic behaviour of a vacuum evaporated multilayer consisting of 1.4 nm Fe and 2 nm Ag layers were studied. The magnetisation of the multilayer shows normal ferromagnetic behaviour while the resistance decreases both in parallel and transversal geometry up to 12 T magnetic field and can be well described by squared Langevin functions. The giant magneto resistance (GMR) is attributed to a small amount of Fe clusters and/or single impurities in the Ag matrix. This explanation is supported by similar results on a 8 nm Ag/25 nm Fe/8 nm Ag trilayer. The concentration distribution due to interface mixing was studied by Rutherford back-scattering spectrometry (RBS) measurements.