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This paper presents a novel and real-time system for interaction with an application or video game via hand gestures. Our system includes detecting and tracking bare hand in cluttered background using skin detection and hand posture contour comparison algorithm after face subtraction, recognizing hand gestures via bag-of-features and multiclass support vector machine (SVM) and building a grammar that generates gesture commands to control an application. In the training stage, after extracting the keypoints for every training image using the scale invariance feature transform (SIFT), a vector quantization technique will map keypoints from every training image into a unified dimensional histogram vector (bag-of-words) after K-means clustering. This histogram is treated as an input vector for a multiclass SVM to build the training classifier. In the testing stage, for every frame captured from a webcam, the hand is detected using our algorithm, then, the keypoints are extracted for every small image that contains the detected hand gesture only and fed into the cluster model to map them into a bag-of-words vector, which is finally fed into the multiclass SVM training classifier to recognize the hand gesture.