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A new fast block-matching algorithm for motion estimation was introduced. This algorithm uses a new enhanced motion vector system combined with an effective DC matching technique. The proposed method transformed the expensive 2-D block-matching problem into a simpler 1-D matching by choosing some blocks as eligible candidates and eliminating the others. Test results of applying the proposed method on a number of MPEG video sequences were included. These results indicated that the proposed method not only can reduce the computational complexity by a factor ranging from 1 to 7, but also can reduce the prediction error by 2 to 20 percent as compared to the full search method. There were some situations in which existing motion estimation techniques obtain a false motion vector with a huge prediction error, while the proposed method can find an enhanced motion vector with an excellent accuracy.