A predictive compression technique is examined, using maximum likelihood prediction of the image pixel based on the Markov mesh model, that encodes the differences via Gordon block-bit-plane (GBBP) encoding. The procedure is very efficient in that it requires a bit rate near the entropy of the source. For images with many quantization levels, maximum likelihood prediction can be cumbersome to implement. Thus, a suboptimal procedure called differential bit-plane coding (DBPC) is investigated. This is easily implemented, even for a large number of quantization levels, and is reasonably efficient.