IEEE 802.15.4 protocol is very much associated with ZigBee protocol and targets low data rate, low power consumption and low cost wireless networking that fits the requirements of wireless sensor networks (WSNs). Due to in- crease in radio frequency (RF) based communication devices and spectrum sharing between these devices makes it impossible to neglect the affect of interference on wireless communications. This paper provides brief description about technical features of IEEE standard 802.15.4 and ZigBee based physical layer structure and wireless channel impulsive interference modeling for wireless sensor networks in smart cities applications. For more accurate estimation of wireless channel characteristics, we have modeled it using alpha-stable distribution function. We have then estimated two out of four parameters of alpha-stable distribution depending on spatial density of wireless devices in specified area around the wireless node in a network. This allows better modeling and estimation of wireless channel conditions. We have analyzed IEEE standard 802.15.4 based communication system performance in terms of the bit error rate (BER). We have varied the total number of active nodes in specified area around sensor node and evaluates its affect on overall BER performance.We have also integrated this PHY layer based on IEEE stan- dard 802.15.4 in the CupCarbon simulator with the consideration of impulsive network interference and its modeling using alpha- stable distribution.