Due to the availability and increased usage of multimedia applications, features such as compression and security has gained more importance. Here, we propose a key generation algorithm and a double image encryption scheme with combined compression and encryption. The keys for encryption are generated using a novel modified convolution and chaotic mapping technique. First, the four least significant bits of the two images were truncated and then combined after permutation using the proposed logistic mapping. Also, cellular automata based diffusion is performed on the resultant image to strengthen the security further. Here, both confusion and diffusion seem to be integrated thus improvising the encryption scheme. The performance results and the test of randomness of the key and the algorithm were found to be successful. Since two images are compressed and encrypted simultaneously, it is useful in real - time scenarios.