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This paper proposes an image watermarking algorithm that is robust to compression methods and noise addition. In the proposed method the wavelet transform of images is taken and watermarking is carried out in the wavelet domain. In order to accomplish low visibility of the watermark within the image and enable robustness against attacks, watermarking of block averages is utilized. Experimental results show that the proposed method is considerably more robust against corrupting effects such as JPEG compression, addition of noise, cropping and scaling.