There is provided a compression system configured to compress logical data objects into one or more accommodation blocks with a predefined size, and a method of operating thereof. The compression system comprises a compression engine capable of compressing input data with the help of sequential encoding one or more input strings and a counter operatively coupled to the compression engine. The counter is configured to keep its ongoing value indicative of a number of input bytes in one or more strings successfully encoded into a given accommodation block; and, responsive to unsuccessful compression of a string into the given accommodation block, to provide the compression engine with information indicative of starting point in the input stream for encoding into the next accommodation block, thus giving rise to a “start indication”.