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The problem of restoration of digital images from their degraded measurements plays a central role in a multitude of practically important applications. A particularly challenging instance of this problem occurs in the case when the degradation phenomenon is modeled by an ill-conditioned operator. In such a situation, the presence of noise makes it impossible to recover a valuable approximation of the image of interest without using some a priori information about its properties. Such a priori information - commonly referred to as simply priors - is essential for image restoration, rendering it stable and robust to noise. Moreover, using the priors makes the recovered images exhibit some plausible features of their original counterpart. Particularly, if the original image is known to be a piecewise smooth function, one of the standard priors used in this case is defined by the Rudin-Osher-Fatemi model, which results in total variation (TV) based image restoration. The current arsenal of algorithms for TV-based image restoration is vast. In this present paper, a different approach to the solution of the problem is proposed based upon the method of iterative shrinkage (aka iterated thresholding). In the proposed method, the TV-based image restoration is performed through a recursive application of two simple procedures, viz. linear filtering and soft thresholding. Therefore, the method can be identified as belonging to the group of first-order algorithms which are efficient in dealing with images of relatively large sizes. Another valuable feature of the proposed method consists in its working directly with the TV functional, rather then with its smoothed versions. Moreover, the method provides a single solution for both isotropic and anisotropic definitions of the TV functional, thereby establishing a useful connection between the two formulae. Finally, a number of standard examples of image deblurring are demonstrated, in which the proposed method can provide resto- ation results of superior quality as compared to the case of sparse-wavelet deconvolution.