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This paper presents an approach of moving vehicle detection and cast shadow removal for video based traffic monitoring. Based on conditional random field, spatial and temporal dependencies in traffic scenes are formulated under a probabilistic discriminative framework, where contextual constraints during the detection process can be adaptively adjusted in terms of data-dependent neighborhood interaction. Computationally efficient algorithm has been developed to discriminate moving cast shadows and handle nonstationary background processes for real-time vehicle detection in video streams. Experimental results show that the proposed approach effectively fuses contextual dependencies and robustly detects moving vehicles under heavy shadows even in grayscale video.