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In this paper, we put forward a novel region matching-based motion estimation scheme to detect objects with accurate boundaries from videos captured by moving camera. Here, a fuzzy edge incorporated Markov random field (MRF) model is considered for spatial segmentation. The algorithm is able to identify even the blurred boundaries of objects in a scene. Expectation Maximization algorithm is used to estimate the MRF model parameters. To reduce the complexity of searching, a new scheme is proposed to get a rough idea of maximum possible shift of objects from one frame to another by finding the amount of shift in positions of the centroid. We propose a χ2-test-based local histogram matching scheme for detecting moving objects from complex scenes from low illumination environment and objects that change size from one frame to another. The proposed scheme is successfully applied for detecting moving objects from video sequences captured in both real-life and controlled environments. It is also noticed that the proposed scheme provides better results with less object background misclassification as compared to existing techniques.