Object segmentation and tracking are problems within the scope of MPEG-4 and MPEG-7 standardization activities. A novel algorithm for both object segmentation and tracking is presented. The algorithm fuses motion, color, and accumulated previous segmentation data at 'region level', in contrast to conventional 'pixel level' approaches. The information fusion is achieved by a rule-based region processing unit which intelligently utilizes the motion information to locate the objects in the scene, the color information to extract the true boundaries, and the segmentation result of the previous frame for tracking the objects. The algorithm is generic in the sense that the modules prior to the rule-based region processor can independently be replaced by alternative units which can achieve the same tasks. In the proposed algorithm, while the recursive-shortests-spanning-tree (RSST) algorithm is used for segmentation purposes, hierarchical-block-matching (HBM) is utilized for estimating motion between frames. The simulation results are very promising for this novel object segmentation approach.