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The latest video codec, H.264/AVC, was presented with lots of new features that can efficiently improve coding performance. In this paper, we employ a stochastic model based selection strategy to solve the variable block size coding problem in H.264/AVC. This strategy is the most efficient method among all other fast mode decision algorithms. It just takes two out of seven modes to find the best mode. The experimental results show that the proposed method can save the coding time by about 32% with 0.1 dB PSNR degradation.