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The large potential bandwidth available in wavelength-division multiplexed optical networks makes this technology of crucial importance for satisfying the ever increasing capacity requirements of the next-generation Internet. In this scenario, the routing and wavelength assignment (RWA) problem that concerns deter- mining the optical paths and wavelengths to be used for connection establishment in a wavelength-routed network, is still one of the most important open issues. In this paper we propose a new on- line dynamic grooming-capable RWA heuristic scheme working on wavelength division multiplexing (WDM) networks as a multistage selection process. The proposed algorithm is transparent with respect to the presence of wavelength converters, achieves very low connection rejection ratios with minimal computational complexity and is appropriate for the modern multilayer optical circuit and wavelength switched networks with sparse wavelength conversion capability.