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In this brief, a new local motion estimator is proposed which can accurately estimate motion activities under varying strong brightness conditions. The proposed estimator makes use of a new block division technique which manages practically to get rid of the adverse influence caused by brightness changes between frames. We also propose a new static sprite coding system using the proposed local motion estimator. The system is characterized not only with the features of accurate motion estimation under varying brightness conditions, but also possesses the capability of coding the brightness variability of the background scene using a single layered sprite image. Experimental results show that the resulting static sprite coding system improves the PSNR by 6.32 dB as compared with the conventional static sprite coding system when the background scenes of the video sequences involve strong brightness variations in the spatial and time domains.