Bit allocation for sequence image compression

The invention relates to a method and system for allocating bits for representing blocks that are transmitted in an image compression system. In a preferred embodiment, a video telephone communications system includes a video transmitting/receiving (transceiving) system including local and remote processing systems separated by a communications link. The local processing system determines indices to be sent to a remote processing system to represent the image. Under one aspect of the invention, the local processing system determines an optimal bit allocation in which the following relationship may be minimized DR=D+ lambda R, where D is the total distortion SIGMA di for a frame; lambda is a value determined as described below; R= SIGMA ri APPROX Rd which is the desired total number of bits for the frame. The optimal bit allocation may determine lambda for an entire frame. Under other aspects of the invention a lambda feedback technique, with or without predecision, may be used. The lambda feedback techniques may determine lambda block by block. Conditional update preselection and mode preselection are other reduced complexity procedures.