Summary: The interest in low bit rate video coding has increased considerably. Despite rapid progress in storage density and digital communication system performance, demand for data-transmission bandwidth and storage capacity continue to exceed the capabilities of available technologies. The growth of data-intensive digital audio, video applications and the increased use of bandwidth-limited media such as video conferencing and full motion video have not only sustained the need for efficient ways to encode analog signals, but made signal compression central to digital communication and data-storage technology. In this paper we explore techniques for compression of image sequences in a manner that optimizes the results for the human receiver. We propose a new motion estimator using two novel block match algorithms which are based on human perception. Simulations with image sequences have shown an improved bit rate while maintaining ``image quality'' when compared to conventional motion estimation techniques using the MAD block match criteria.