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A new color filter array (CFA) interpolation technique for single-sensor digital cameras is introduced. The proposed method utilizes an edge-sensing interpolation mechanism in conjunction with color-difference model based correction steps performed for each color channel. Thus, the proposed computationally efficient interpolation scheme is able to overcome the limitations of existing CFA based image acquisition solutions and restore color images without introducing false colors, edge blurring or visual artifacts. This produces excellent results in terms of subjective and objective image quality measures, while outperforming widely used CFA interpolation methods.