Interframe image coding techniques in real-time provide a very attractive scheme of reducing the bandwidth required for coding and transmitting natural video scenes. This paper proposes a modification of two existing algorithms for motion compensated interframe coding. It is shown that the modified method involves a reduced computational complexity while being compatible with the performance obtained by the previous algorithms. Implementation of the new algorithm is consequently simplified and a design for the hardware using a parallel processing approach is studied. The system is proposed for use in NTSC TV pictures for applications ranging from broadcast quality TV to video teleconferencing systems.