Motion estimation, which has been widely used in various image sequence coding schemes, plays a key role in the transmission and storage of video signals at reduced bit rates. There are two classes of motion estimation methods, Block matching algorithms (BMA) and Pel-recursive algorithms (PRA). Due to its implementation simplicity, block matching algorithms have been widely adopted by various video coding standards such as CCITT H.261, ITU-T H.263, and MPEG. In BMA, the current image frame is partitioned into fixed-size rectangular blocks. The motion vector for each block is estimated by finding the best matching block of pixels within the search window in the previous frame according to matching criteria. The goal of this work is to find a fast method for motion estimation and motion segmentation using proposed model. Recent day Communication between ends is facilitated by the development in the area of wired and wireless networks. And it is a challenge to transmit large data file over limited bandwidth channel. Block matching algorithms are very useful in achieving the efficient and acceptable compression. Block matching algorithm defines the total computation cost and effective bit budget. To efficiently obtain motion estimation different approaches can be followed but above constraints should be kept in mind. This paper presents a novel method using three step and diamond algorithms with modified search pattern based on logical image for the block based motion estimation. It has been found that, the improved PSNR value obtained from proposed algorithm shows a better computation time (faster) as compared to original Three step Search (3SS/TSS ) method .The experimental results based on the number of video sequences were presented to demonstrate the advantages of proposed motion estimation technique.