Disclosed are a method and system for video compression, wherein the video encoder has low computational complexity and high compression efficiency. The disclosed system comprises a video encoder and a video decoder, wherein the method for encoding includes the steps of converting a source frame into a space-frequency representation; estimating conditional statistics of at least one vector of space-frequency coefficients; estimating encoding rates based on the said conditional statistics; and applying Slepian-Wolf codes with the said computed encoding rates. The preferred method for decoding includes the steps of; generating a side-information vector of frequency coefficients based on previously decoded source data, encoder statistics, and previous reconstructions of the source frequency vector; and performing Slepian-Wolf decoding of at least one source frequency vector based on the generated side-information, the Slepian-Wolf code bits and the encoder statistics.