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Architecture elements suitable for VLSI implementation and real-time operation in movement-compensated video (MCV) processors are presented. The algorithm used in the video processor is based on motion estimation and compensation techniques. An overview of the algorithm is given with emphasis placed on one of the key functions used in the prediction, the two-dimensional interpolator. A VLSI implementation is presented which incorporates design techniques of pipelining, parallelism, and module replication. Furthermore, it is shown that modifications to the algorithm can be made based on the use of a high degree of parallelism yielding an efficient structure which relieves constraints for high-speed execution. The operations then rely on a simpler one-dimensional interpolator to form one of the building blocks of the two-dimensional interpolator. It is indicated that the parallel structure which is formed with these building blocks can be implemented on two circuits and that it can operate at speeds meeting real-time requirements.