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In this paper, Human Visual System (HVS) characteristics are modeled using a Fuzzy Inference System (FIS) for robust image watermarking. The fuzzy input variables corresponding to luminance sensitivity, edge sensitivity computed using threshold and contrast sensitivity computed using variance are fed to a FIS driven by ten Fuzzy inference rules. The FIS produces a single output weighting factor which is used to embed a randomly generated normalized watermark with in the host image in the DCT domain. The signed image has good perceptual quality and is subject to StirMark image processing attacks. The high computed value of PSNR indicates robustness of the embedding algorithm. The watermark is extracted from the signed image using famous Cox's algorithm. The embedded and recovered watermarks are used to compute SIM(XX) correlation parameter which shows that the extraction process is quite successful and the algorithm has good practical applications.