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Motion-compensated prediction is the key to high-performance video coding. Previous works have explored alternatives to the classical translational motion model in video coding, but the cumulative rate-distortion performance has not been significant enough to see such approaches adopted in mainstream standards. In this paper, we propose a new extended prediction strategy that incorporates non-translational motion prediction. This method uses an elastic motion model with 2-D cosine basis functions to estimate non-translational motion between the blocks. To achieve superior performance, the proposed scheme takes advantage of larger blocks with multi-level partitioning. Experimental results show that this combined framework outperforms the existing techniques, including those available in the recent H.264 standard.