We determine the physical parameters (magnetic field and Doppler factor) of
the homogeneous synchrotron self-Compton model allowed by the observed X-r
ay to gamma-ray spectra and variability of Markarian 501 during the 1997 Ap
ril 15-16 flaring activity. We find that magnetic fields between 0.07 and 0
.6 G and Doppler factors between 12 and 36 could fit (depending on observed
variability time-scale) these observations. We take account of photon-phot
on pair production interactions of gamma-ray photons occurring both inside
the emission region and during propagation to Earth, and find these to be e
xtremely important in correctly determining the allowed model parameters. P
revious estimates of the allowed parameter space have neglected this effect
. Future multiwavelength campaigns during strong flaring activity, includin
g observations from optical to TeV gamma-rays, should enable the physical p
arameters to be further constrained.