Human Activity Discovery & Recognition (HADR) is a complex, diverse and challenging task but yet an active area of ongoing research in the Department of Defense. By detecting, tracking, and characterizing cohesive Human interactional activity patterns, potential threats can be identified which can significantly improve situation awareness, particularly, in Persistent Surveillance Systems (PSS). Understanding the nature of such dynamic activities, inevitably involves interpretation of a collection of spatiotemporally correlated activities with respect to a known context. In this paper, we present a State Transition model for recognizing the characteristics of human activities with a link to a prior contextbased ontology. Modeling the state transitions between successive evidential events determines the activities' temperament. The proposed state transition model poses six categories of state transitions including: Human state transitions of Object handling, Visibility, Entity-entity relation, Human Postures, Human Kinematics and Distance to Target. The proposed state transition model generates semantic annotations describing the human interactional activities via a technique called Casual Event State Inference (CESI). The proposed approach uses a low cost kinect depth camera for indoor and normal optical camera for outdoor monitoring activities. Experimental results are presented here to demonstrate the effectiveness and efficiency of the proposed technique.