Digital image have been expanding in usage. The importance of image compression algorithms have been increased, to produce smaller file size with a lower computational requirement. The wavelet transform offers a natural decomposition of images at multiple resolutions, since the wavelet transform can decompose images into various multiresolution subbands, where the correlation exists. A novel technique for image compression by taking advantage of correlation is addressed. It is based on

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... e edge detection from the LL band of the lowest resolution level to predict the edge in the LH, HL and HH bands in the higher resolution level. If the coefficient is predictive as an edge it is preserved, otherwise it is discarded. In the decoder, the location of the preserved coefficients can also be found as in the encoder. Results showed that photo images give a higher degree of compression compared with the satellite images, due to the information in the satellite images is higher than in the photo images.