Motion Compensation is one of the most effective techniques used in in
terframe data compression. In this paper we present a parallel block-m
atching algorithm for estimating interframe displacement of blocks wit
h minimum error. The algorithm is designed for a simple parallel archi
tecture to process video in real time. The blocks may have variable si
ze and shape depending on a split-and-merge technique. The algorithm p
erforms a segmentation of the image into regions (objects) moving in t
he same direction and uses this knowledge to improve the transmission
of the displacement vectors. This segmentation identifies the part of
the frame ''active'' with respect to the previous frame and preserves
some of the spatial correlation between blocks.