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In dual frame motion compensation (DFMC), one short-term reference frame and one long-term reference frame (LTR) are utilized for motion compensation. The performance of DFMC is heavily influenced by the jump updating parameter and bit allocation for the reference frames. In this paper, first the rate-distortion performance analysis of motion compensated prediction in DFMC is presented. Based on this analysis, an adaptive jump updating DFMC (JU-DFMC) with optimal LTR selection and bit allocation is proposed. Subsequently, an error resilient JU-DFMC is further presented based on the error propagation analysis of the proposed adaptive JU-DFMC. The experimental results show that the proposed adaptive JU-DFMC achieves better performance over the existing JU-DFMC schemes and the normal DFMC scheme, in which the temporally most recently decoded two frames are used as the references. The performance of the adaptive JU-DFMC is significantly improved for video transmission over noisy channels when the specified error resilience functionality is introduced.