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Until now, the structural pattern at the specific gray level or at the special condition of image data was mainly issued in dithering or error diffusion method. This problem was more critical in flat panel display because of the heavy intensity of unit luminance. One of the authors published a concept, "confining error-carry within the dither mask" as a patent, but we have not published about the technology in detail as a paper. Based on the concept, in this paper, at first, we propose an algorithm named "confined error diffusion (CED)" which has the well organized architecture between random error diffusion and ordered dither method to improve the image quality and gray level expression for the flat panel display. Then, we propose an advanced CED algorithm to improve the problem of the CED related to the gradation. This algorithm can be adapted to flat panel display.