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In the paper, a novel stereo video codec algorithm based on fast disparity and motion estimation is proposed. Firstly, this paper makes some changes to the conventional fractal video coding method. We use tree structured partition method to partition the encoding frames. Besides, domain block searching strategy and range is used in the coding processing. Based on the feature of video motion and structure of stereo video, a fast disparity and motion estimation algorithm is used to stereo video coding. Compared with the traditional fractal stereo video coding, experimental results indicate that the proposed algorithm spends much less encoding time and achieves almost the same compression ratio and compression quality. At the same time, computing complexity is much smaller.