Modelling uncertainty is a key limitation to the applicability of the classical Kalman filter for state estimation of dynamic systems. For such systems with bounded modelling uncertainty, the interval Kalman filter (IKF) is a direct extension of the former to interval systems. However, its usage is not yet widespread owing to the over-conservatism of interval arithmetic bounds. In this paper, the IKF equations are adapted to use an ellipsoidal arithmetic that, in some cases, provides tighter bounds than direct, rectangular interval arithmetic. In order for the IKF to be useful, it must be able to provide reasonable enclosures under all circumstances. To this end, a hybrid ellipsoidal-rectangular enclosure algorithm is proposed, and its robustness is evidenced by its application to two characteristically different systems for which it provides stable estimate bounds, whereas the rectangular and ellipsoidal approaches fail to accomplish this in either one or the other case.