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Current difference-expansion (DE) embedding techniques perform one layer embedding in a difference image. They do not turn to the next difference image for another layer embedding unless the current difference image has no expandable differences left. The obvious disadvantage of these techniques is that image quality may have been severely degraded even before the later layer embedding begins because the previous layer embedding has used up all expandable differences, including those with large magnitude. Based on integer Haar wavelet transform, we propose a new DE embedding algorithm, which utilizes the horizontal as well as vertical difference images for data hiding. We introduce a dynamical expandable difference search and selection mechanism. This mechanism gives even chances to small differences in two difference images and effectively avoids the situation that the largest differences in the first difference image are used up while there is almost no chance to embed in small differences of the second difference image. We also present an improved histogram-based difference selection and shifting scheme, which refines our algorithm and makes it resilient to different types of images. Compared with current algorithms, the proposed algorithm often has better embedding capacity versus image quality performance. The advantage of our algorithm is more obvious near the embedding rate of 0.5 bpp.