1. A method for displaying color images on a color display system with a limited number of simultaneously displayable colors comprising the steps of: digitizing a color image to form an input image comprised of digital pixel values; forming a multi-dimensional histogram of the digital pixel values; detecting the peak values of the formed histogram and partitioning the histogram into separate volumes around each peak value; segmenting the input image into image regions corresponding to the volumes of the partitioned histogram; and determining for each region an allocated number of colors for rendering each region such that the sum of all the allocated numbers of colors equals the limited number of displayable colors; selecting from the limited number of displayable colors provided by the color display system the allocated number of colors to form a set of signals that when applied to the color display system will properly render the image.