Fractal　image　compression　is　a　relatively　recent　image　compression　method.　Its　extension　to　a　sequence　of　motion　images　is　important　in　video　compression　applications.　There　are　two　basic　fractal　compression　methods,　namely　the　cube-based　and　the　frame-based　methods,　being　commonly　used　in　the　industry.　However　there　are　advantages　and　disadvantages　in　both　methods.　This　paper　proposes　a　hybrid　algorithm　highlighting　the　advantages　of　the　two　methods　in　order　to　produce　a　good　compression　algorithm　for　video　industry.　Experimental　results　show　the　hybrid　algorithm　improves　the　compression　ratio　and　the　quality　of　decompressed　images.　(c)　2005　Elsevier　Ltd.　All　rights　reserved.