Sendmail configuration

Hi All,
I am using sendmail via php mail function to send
emails. However few servers reject my mails with
the error 'Sender address rejected: Domain not
found', since mails from my server are sent as
email@localhost.localdomain. How do I change this
to a valid domain name ? We only own a public IP.
we dont really have a domain name, is it possible
to use IP ?
Regards
Deepan
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