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This paper presents and compares algorithms for combined acoustic echo cancellation and noise reduction for hands-free telephones. A structure is proposed, consisting of a conventional acoustic echo canceler and a frequency domain postfilter in the sending path of the hands-free system. The postfilter applies the spectral weighting technique and attenuates both the background noise and the residual echo which remains after imperfect echo cancellation. Two weighting rules for the postfilter are discussed. The first is a conventional one, known from noise reduction, which is extended to attenuate residual echo as well as noise. The second is a psychoacoustically motivated weighting rule. Both rules are evaluated and compared by instrumental and auditive tests. They succeed about equally well in attenuating the noise and the residual echo. In listening tests, however, the psychoacoustically motivated weighting rule is mostly preferred since it leads to more natural near end speech and to less annoying residual noise.