The coding of video sequences has been the focus of research in recent years. High Definition TV(HDTV), video conferencing and video on demand(VOD) are some of the well known applications. In the moving picture compression, motion estimation algorithm plays a very important role, but due to its high computational complexity, there has been many approaches to overcome this difficulty. We propose a new block matching criterion that uses modified cost functions. This new block matching criterion classifies pixels into 2-levels, 4-levels and 8-levels with a suitable thresholding method. We also show that our new proposed algorithms can easily be combined with many other fast motion estimation algorithms with good performance.