A procedure for combined image watermarking and compression, based on the Hermite projection method is proposed. The Hermite coefficients obtained by using the Hermite expansion are used for watermark embedding. The image can be efficiently reconstructed by using a set of Hermite coefficients that is quite smaller than the number of original ones. Hence, the watermark embedding is actually done in the compressed domain, while maintaining still high image quality (measured by high PSNR). The efficiency of the proposed procedure is proven experimentally, showing high robustness even for very strong standard attacks. Moreover, the method is robust not only to the standard attacks, but to the geometrical attacks, as well. The proposed approach can be suitable for different copyright and ownership protection purposes, especially in real-applications that require image compression, such as multimedia and Internet applications, remote sensing and satellite imaging.