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The upcoming video coding standard, H.264, uses motion estimation with multiple block sizes to improve the rate-distortion performance. However, full exhaustive search of all block sizes is computational intensive with complexity increasing linearly with the number of allowed block size. In this paper, a novel fast multi-block motion estimation (FMBME) is proposed for H.264 video coding. Experimental results show that the proposed FMBME can efficiently reduce the computational cost by 40.73% with similar visual quality and bit rate.