This paper attempts to develop an efficient online algorithm for terrain following in completely unknown rough terrain environments while incorporating aircraft dynamics in the guidance strategy. Unlike most existing works, the proposed algorithm does not generate the flight path directly. The algorithm employs acquired information from the vehicle onboard sensors and rapidly issues appropriate Guidance Commands (GCs) at every point along the way. A suitable dynamic model is developed which takes the lags in the vehicle dynamics into account. The flight path forms gradually as a result of applying the GCs to the vehicle dynamics. Terrain-conforming capability afforded by this approach allows for autonomous and safe low-level flight in unknown mountainous areas. It considerably enhances the autonomy level of the vehicle and in the case of manned aircraft could significantly lead to pilot workload reduction. The proposed scheme is proven to be promising for online applications.