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We propose a fast macroblock (MB) mode prediction and decision algorithm based on temporal correlation for P-slices in the H.264/AVC video standard. There are nine 4times4 and 8times8 modes, and four 16 times 16 modes in the intra-mode prediction and 8 block types including SKIP mode exist for the best coding gain based on rate-distortion (R-D) optimization. This scheme gives rise to exhaustive computations (search) in the coding procedure. To overcome this problem, a thresholding method for fast inter-mode decision using an MB tracking scheme to find the most correlated block and the R-D cost of that block, are suggested for early inter-mode determination. An inter-mode candidate selection method is first suggested through the statistical analysis. Then, an adaptive inter-mode search algorithm is applied by using the R-D cost of the most correlated MB. Through comparative analysis, a speed-up factor of up to 70.83 % was verified with a negligible bit increment and a minimal loss of image quality.