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In this paper, we present a new rate control mechanism for delay sensitive MPEG-2 video services over ATM networks. The rate control constraints the video bitstream to respect the three negotiated VBR ATM traffic contract parameters modelled by a dual leaky bucket. We first develop several new mathematical relationships that permit to predict the bit rate on a frame-by-frame basis. Then a rate control algorithm, based on both a sustainable-rate control and an instantaneous-rate control, is derived. The contribution mainly lies on the rate control flexibility. Indeed, the resulting mechanism is independent of the GOP structure and length. Moreover, a macroblock-based adaptive quantization scheme may be incorporated without degrading its performance. Simulations were performed on several TV-resolution sequences. The proposed mechanism appeared to behave consistenly; for instance, the quantizer scale, derived from the rate control on a frame-by-frame basis, converges very quickly to a stable value.