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We propose an inter mode decision scheme for P slices in the H264 video coding standard. Our scheme initially exploits neighborhood information jointly with a set of skip mode conditions for enhanced skip mode decision. It subsequently performs inter mode decision for the remaining macroblocks by using a gentle set of smoothness constraints. For RD performance very close to the standard, we achieve 35-58% reduction in run times and 33-55% reduction in CPU cycles for both the rate controlled and the non rate controlled versions of H264. Compared to other non gradient based work that has been proposed as input to the standard, gains of 9-23% in run times and 7-22% in CPU cycles are also reported. Finally, with respect to other gradient based approaches for mode decision, gains of 9% are reported in run times.