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It has been well established that state-of-the-art wavelet image coders outperform block transform image coders in the rate-distortion (R-D) sense by a wide margin. Wavelet-based JPEG2000 is emerging as the new high-performance international standard for still image compression. An often asked question is: how much of the coding improvement is due to the transform and how much is due to the encoding strategy? Current block transform coders such as JPEG suffer from poor context modeling and fail to take full advantage of correlation in both space and frequency sense. This paper presents a simple, fast, and efficient adaptive block transform image coding algorithm based on a combination of prefiltering, postfiltering, and high-order space-frequency context modeling of block transform coefficients. Despite the simplicity constraints, coding results show that the proposed coder achieves competitive R-D performance compared to the best wavelet coders in the literature.