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We present a new framework for the hierarchical segmentation of color images. The proposed scheme comprises a nonlinear scale-space with vector-valued gradient watersheds. Our aim is to produce a meaningful hierarchy among the objects in the image using three image components of distinct perceptual significance for a human observer, namely strong edges, smooth segments and detailed segments. The scale-space is based on a vector-valued diffusion that uses the Additive Operator Splitting numerical scheme. Furthermore, we introduce the principle of the dynamics of contours in scale-space that combines scale and contrast information. The performance of the proposed segmentation scheme is presented via experimental results obtained with a wide range of images including natural and artificial scenes.