Most printers and some display devices are bilevel (black or white) and therefore not capable of reproducing continuous tone pictures. Digital halftoning algorithms transform digital gray scale images into bilevel ones which give the appearance of containing various shades of gray. A halftoning algorithm is presented in which novel concepts are combined resulting in an output image in which moiré patterns are suppressed and, at the same time, the edges are enhanced. Various other artifacts associated with the halftoning process, such as contouring due to coarse quantization or to textural changes, are also absent from the output images in the proposed scheme. The algorithm separates the image into many small clusters which are processed independently and, therefore, it is capable of parallel implementation.