A robust approach for joint motion and disparity estimation in stereo sequences to synthesize arbitrary intermediate views is presented. The improved concept for stereo image analysis is based on a modified block matching algorithm. In which a cost function consisting of area-based correlation together with an appropriately weighted temporal smoothness term is applied. A confidence measure to evaluate the reliability of estimated correspondences is introduced. In occluded image areas and image points with unreliable motion or disparity assignments, considerable improvements are obtained applying an edge-assisted vector interpolation strategy. Two different image synthesis concepts are presented as well. The reported approach is verified by processing a set of sequences taken with stereo cameras having large interaxial distances. Computer simulations show that telepresence illusion with continuous motion parallax and good image quality can be obtained using the methods presented.