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We present a novel high bit rate LSB audio watermarking method. The basic idea of the proposed LSB algorithm is watermark embedding that causes minimal embedding distortion of the host audio. Using the proposed two-step algorithm, watermark bits are embedded into higher LSB layers, resulting in increased robustness against noise addition or MPEG compression. Listening tests showed that the perceptual quality of watermarked audio is higher in the case of the proposed method than in the standard LSB method.