Automatic detection of moving objects in video sequences is a widely researched topic with application in surveillance operations. Methods based on background cancellation by frame differencing are extremely common. However this process becomes much more complicated when the background is not completely stable due to camera motion. This thesis considers a space application where surveillance cameras around a shuttle launch site are used to detect any debris from the shuttle. The ground shake due to the impact of the launch causes the background to be shaky. We stabilize the background by translation of each frame, the optimum translation being determined by minimizing the energy difference between consecutive frames. This process is optimized by using a sub-image instead of the whole frame, the sub-image being chosen by taking an edge detection plot of the background and choosing the area with greatest density of edges as the sub-image of interest. The stabilized sequence is then processed by taking the difference between consecutive frames and marking areas with high intensity as the areas where motion is taking place. The residual noise from the background stabilization part is filtered out by masking the areas where the background has edges, as these areas have the highest probability of false alarms due to background motion.