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This paper presents a semi-fragile watermarking technique capable of verifying the authenticity and recovery of the image. The proposed approach has the capability to accurately detect and differentiate modifications applied on the watermarked image. Alteration sensitivity has been improved compared to previous approaches and it can concisely determine the region of the watermarked image where the integrity verification fails. Semi-fragility makes the proposed method tolerant against JPEG lossy compression and other acceptable modifications but sensitive to malicious attacks such as cutting and pasting. The exact low pass version of the image is recovered by using the lossless compression (Huffman coding). Simulation results demonstrate that the alteration sensitivity of the proposed authentication scheme is much better compared to the previous approaches.