Several fragile watermarking schemes presented in the literature are either vulnerable to vector quantization (VQ) counterfeiting attacks or sacrifice localization accuracy to improve security. Using a hierarchical structure, we propose a method that thwarts the VQ attack while sustaining the superior localization properties of blockwise independent watermarking methods. In particular, we propose dividing the image into blocks in a multilevel hierarchy and calculating block signatures in this hierarchy. While signatures of small blocks on the lowest level of the hierarchy ensure superior accuracy of tamper localization, higher level block signatures provide increasing resistance to VQ attacks. At the top level, a signature calculated using the whole image completely thwarts the counterfeiting attack. Moreover, "sliding window" searches through the hierarchy enable the verification of untampered regions after an image has been cropped. We provide experimental results to demonstrate the effectiveness of our method.