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The problem of recognition of objects in images is investigated from the simultaneous viewpoints of image bandwidth compression and automatic target recognition. A scenario is suggested in which recognition is implemented on features in the block cosine transform domain which is useful for data compression as well. While most image frames would be processed by the automatic recognition algorithms in the compressed domain without need for image reconstruction, this still allows for visual image classification of targets with poor recognition rates (by human viewing at the receiving terminal). It has been found that the Mandala sorting of the block cosine domain results in a more effective domain for selecting target identification parameters. Useful features from this Mandala/cosine domain are developed based upon correlation parameters and homogeneity measures which appear to successfully discriminate between natural and man-made objects. The Bhattacharyya feature discriminator is used to provide a 10:1 compression of the feature space for implementation of simple statistical decision surfaces (Gaussian and minimum distance classification). Imagery sensed in the visible spectra with a resolution of approximately 5-10 ft is used to illustrate the success of the technique on targets such as ships to be separated from clouds. A data set of 38 images is used for experimental verification with typical classification results ranging from the high 80's to low 90 percentile regions depending on the options choosen.