Line of Sight exists between two Squares if a straight line can be drawn from a point anywhere in the first Square to a point anywhere in the second Square without crossing any wall or passing any Square that contains an obstacle. Obstacles include walls, Models and Blip Tokens. Page 24 in the rulebook also says in passing that some Hazards provide cover; but it turns out they only do so indirectly (see page about Hazards for details), and that they don't block Line of Sight.
Walls, as well as other enviroment features that count as walls for the purpose of Line of Sight, are marked with a white / light grey colour on the Map Tiles.
Wall sections may be interrupted by door/window holes; these are often marked with the same kind of borders as Red Squares, except only the one side of the Square with the wall is marked in that way.
Obstacle
An Obstacle is anything on the Mission Map that prevents a unit from moving onto a specific Square. Obstacles also block Line of Sight. Obstacles include walls, Models and Blip Tokens, but not Hazards.