A fast iterative motion estimation method enables motion estimation to take place with fewer computations. The motion estimation and error determination steps are combined, each position in the search area is monitored to determine whether error value reaches the minimum over iterations by keeping track of convergence status, a refinement search is applied (thus, a smaller search area than a conventional process), and the difference of the error value and the minimum error value is used for each position in the search area to decide whether to further calculate the error value for that position. Each of these modifications helps minimize the number of computations used in motion estimation.