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In many content-based video processing systems, the presence of moving objects limits the accuracy of global motion estimation (GME). On the other hand, the inaccuracy of global motion parameter estimates affects the performance of motion segmentation. In this paper, we introduce a procedure for simultaneous object segmentation and GME from a coarsely sampled (i.e., block-based) motion vector (MV) field. The procedure starts with removing MV outliers from the MV field, and then performs GME to obtain an estimate of global motion parameters. Using these estimates, global motion is removed from the MV field, and moving region segmentation is performed on this compensated MV field. MVs in the moving regions are treated as outliers in the context of GME in the next round of processing. Iterating between GME and motion segmentation helps improve both GME and segmentation accuracy. Experimental results demonstrate the advantage of the proposed approach over state-of-the-art methods on both synthetic motion fields and MVs from real video sequences.