This paper presents a constructive method to design output-feedback cooperative controllers that force a group of N unicycle-type mobile robots with limited sensing ranges to perform desired formation tracking, and guarantee no collisions between the robots. The robot velocities are not required for control implementation. For each robot an interlaced observer, which is a reduced order observer plus an interlaced term, is designed to estimate the robot unmeasured velocities. The observer design is based on a coordinate transformation that transforms the robot dynamics to a new dynamics, which does not contain velocity quadratic terms. The interlaced term is determined after the formation control design is completed to void difficulties due to observer errors and consideration of collision avoidance. Smooth and p times differentiable jump functions are introduced and incorporated into novel potential functions to design a formation tracking control system. Despite the robot limited sensing ranges, no switchings are needed to solve the collision avoidance problem. Simulations illustrate the results.