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An approach for filling-in blocks of missing data in wireless image transmission is presented in this paper. When compression algorithms such as JPEG are used as part of the wireless transmission process, images are first tiled into blocks of 8×8 pixels. When such images are transmitted over fading channels, the effects of noise can kill entire blocks of the image. Instead of using common retransmission query protocols, we aim to reconstruct the lost data using correlation between the lost block and its neighbors. If the lost block contained structure, it is reconstructed using an image inpainting algorithm, while texture synthesis is used for the textured blocks. The switch between the two schemes is done in a fully automatic fashion based on the surrounding available blocks. The performance of this method is tested for various images and combinations of lost blocks. The viability of this method for image compression, in association with lossy JPEG, is also discussed.