This project presents an enhanced Iraqi vehicle plate identification system, incorporating digital processing technologies and the XOR Auto-Associative Memory advanced associative memory algorithm, towards a fast and efficient performance under diverse conditions of imagery. The system consists of three major stages: identification of the panel area, or localization, using edge transformations and morphological operations; symbol segmentation, or segmentation, based on horizontal and vertical projections for the exact extraction of numbers and letters; and finally, recognition use of XOR operations and a binary distance criterion known as Hamming Distance. The model was tested on 420 images of panels in different scenarios of lighting: day, night, shadows, fog, and low light. It produced an accuracy of 98.10% in identifying the panel area and 98.14% in segmenting symbols, while the XOR algorithm gave the best result in recognizing 2,958 symbols with an accuracy of 99.93% in 2.4 ms per symbol. Another contribution of this system is that it has proven to be able to work in real time, processing 15–18 panels per second. These results confirm the efficiency of the proposed algorithm in dealing with distorted or low-quality images and stand out as a simplified and effective alternative to the traditional methods and old associative memory algorithms. Therefore, this research provides a practical and reliable framework for identifying Iraqi vehicle plates in security and traffic applications with high time requirements.