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Rate smoothing is essential for achieving lower delay when transmitting real-time video over the network. Recently, "explicit slice-based mode selection" (ESM) is proposed as a new way of achieving this goal together with its inherent quality smoothness and error resilience features. However previous studies focus on the practical aspects and do not address an optimized solution. In this paper, we propose a rate-distortion (RD) optimized solution for finding the best location and size of the intra-coded slices. The experimental results show that for a target bit rate the optimized scheme is able to offer performance close to that of mode selection on a macroblock level, over wireless channels with different packet loss rates. Moreover, the optimized ESM algorithm provides significant advantages of granular bit stream prioritization for network transmission. However, the RD based optimization is in general computationally expensive. We therefore propose a heuristic approach which incorporates both channel statistics and sequence characteristics. Results show that it yields close to optimal performance at lower complexity.