What we believe to be a new technique, based on a modified Gerchberg-Saxton algorithm (MGSA) and a phase modulation scheme in the Fresnel-transform domain, is proposed to reduce cross talks existing in multiple-image encryption and multiplexing. First, each plain image is encoded and multiplexed into a phase function by using the MGSA and a different wavelength/position parameter. Then all the created phase functions are phase modulated to result in different shift amounts of the reconstruction images before being combined together into a single phase-only function. Simulation results show that the cross talks between multiplexed images have been significantly reduced, compared with prior methods [Opt. Lett.30, 1306 (2005); J. Opt. A8, 391 (2006)], thus presenting high promise in increasing the multiplexing capacity and encrypting grayscale and color images.