In this paper a video compression technique with comparable low bit rates is presented. The overlapping block motion compansation is combined with discrete wavelet transform which followed by Lloyd Max quantization and zerotree structure. The novel feature of this coding scheme is the combination of hierarchical finite state vector quantization (HFSVQ) with the zerotree structure to encode the quantized wavelet coefficients. In the first stage of our simulation, the intra frame coding using MPEG4-VM, EZW, ZTE and ZTW-HFSVQ are compared at QCIF resolution. In the second stage, MPEG4-VM, EZW, ZTE and H263 are compared with the introduced ZTW-HFSVQ scheme for P-frames. The simultion results are presented in comparison with those scheme mentioned above. It shows that the proposed coding scheme performs better than the other schemes for both I and P frames.