A method of coding a block of video data using palette coding in a video coding system, the method comprising: receiving input data associated with a current block; and determining a previous palette-index prediction mode associated with one or more previously-coded samples; characterized by: if the previous palette-index prediction mode is a predetermined palette-index prediction mode, determining whether the predetermined palette-index prediction mode exists in a candidate palette-index prediction mode list for one or more current samples of the current block; and if the predetermined palette-index mode exists in the candidate palette-index prediction mode list, removing the predetermined palette-index prediction mode from the candidate palette-index prediction mode list to generate a reduced candidate palette-index prediction mode list, and applying palette encoding or decoding to said one or more current samples of the current block using the reduced candidate palette-index prediction mode list to cause that a palette-index prediction mode next to the previous palette-index prediction mode in encoding or decoding order is not the predetermined palette-index prediction mode; wherein the predetermined mode is a copy-above-run mode to use one or more corresponding first samples in an above row to predict one or more first samples of the current block, an index-run mode to encode or decode one or more second samples of the current block using a same first sample value, or a copy-above-N-row mode to use one or more corresponding third samples in above R rows to predict one or more third samples of the current block. receiving input data associated with a current block; and determining a previous palette-index prediction mode associated with one or more previously-coded samples; characterized by: if the previous palette-index prediction mode is a predetermined palette-index prediction mode, determining whether the predetermined palette-index prediction mode exists in a candidate palette-index prediction mode list for one or more current samples of the current block; and if the predetermined palette-index mode exists in the candidate palette-index prediction mode list, removing the predetermined palette-index prediction mode from the candidate palette-index prediction mode list to generate a reduced candidate palette-index prediction mode list, and applying palette encoding or decoding to said one or more current samples of the current block using the reduced candidate palette-index prediction mode list to cause that a palette-index prediction mode next to the previous palette-index prediction mode in encoding or decoding order is not the predetermined palette-index prediction mode; wherein the predetermined mode is a copy-above-run mode to use one or more corresponding first samples in an above row to predict one or more first samples of the current block, an index-run mode to encode or decode one or more second samples of the current block using a same first sample value, or a copy-above-N-row mode to use one or more corresponding third samples in above R rows to predict one or more third samples of the current block. if the previous palette-index prediction mode is a predetermined palette-index prediction mode, determining whether the predetermined palette-index prediction mode exists in a candidate palette-index prediction mode list for one or more current samples of the current block; and if the predetermined palette-index mode exists in the candidate palette-index prediction mode list, removing the predetermined palette-index prediction mode from the candidate palette-index prediction mode list to generate a reduced candidate palette-index prediction mode list, and applying palette encoding or decoding to said one or more current samples of the current block using the reduced candidate palette-index prediction mode list to cause that a palette-index prediction mode next to the previous palette-index prediction mode in encoding or decoding order is not the predetermined palette-index prediction mode; wherein the predetermined mode is a copy-above-run mode to use one or more corresponding first samples in an above row to predict one or more first samples of the current block, an index-run mode to encode or decode one or more second samples of the current block using a same first sample value, or a copy-above-N-row mode to use one or more corresponding third samples in above R rows to predict one or more third samples of the current block.