In this paper we introduce a new framework for image registration. 

Our formulation is based on consistent discretization of the optimiza- 

tion problem coupled with a multigrid solution of the linear system 

which evolve in a Gauss-Newton iteration. We show that our dis- 

cretization is h-elliptic independent of parameter choice and therefore 

a simple multigrid implementation can be used. To overcome poten- 

tial large nonlinearities and to further speed up computation, we use 

a multilevel continuation technique. We demonstrate the eciency of 

our method on a realistic highly nonlinear registration problem.