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A novel semi-fuzzy (SF) rate control algorithm (RCA) for variable bit rate (VBR) video applications is proposed. The proposed RCA is optimized to provide high quality compressed video bit streams in a wide operating range from constant quality to nearly constant bit rate. Thanks to a low degree of computational complexity, it is suitable for real-time applications of VBR video. The proposed RCA operates under given buffer size, delay and quality constraints. It provides a VBR video bit stream by controlling the quantization parameter (QP) on a picture basis. The QP is mainly controlled by a fuzzy rate controller and a deterministic quality controller, which are optimized such that they minimize the variation of quality to provide encoded video with high and stable visual quality. The proposed RCA has been implemented in an H.264/AVC video codec and the experimental results show that it provides a high-level average quality for encoded video while strictly obeying the buffering delay and quality constraints.