Motion-compensated lifted wavelets have received much interest for video compression. While they are biorthogonal, they may substantially deviate from orthonormality due to motion compensation, even if based on an orthogonal or near-orthogonal wavelet. A temporal transform for video sequences that maintains orthonormality while permitting flexible motion compensation would be very desirable. We have recently introduced such a transform for unidirectional motion compensation from one previous frame. In this paper, we extend this idea to bidirectional motion compensation. Orthonormality is maintained for arbitrary integer-pixel motion compensation by cascading a sequence of incremental orthogonal 3 × 3 transforms. The energy of three input pictures is accumulated in two temporal low-bands while the temporal high-band is zero if the input pictures are identical after motion compensation. Further, the motion-compensated orthogonal transforms can be cascaded to build a dyadic wavelet dec...