In lossy image/video encoding, there is a compromise between the number of bits and the extent of distortion. Optimizing the allocation of bits to different sources, such as frames or blocks, can improve the encoding performance. In intra-frame encoding, due to the dependency among macro blocks (MBs) introduced by intra prediction, the optimization of bit allocation to the MBs usually has high complexity. So far, no practical optimal bit allocation methods for intra-frame encoding exist, and the commonly used method for intra-frame encoding is the fixed-QP method. We suggest that the QP selection inside an image/a frame can be optimized by aiming at the constant perceptual quality (CPQ). We proposed an iteration-based bit allocation scheme for H.264/AVC intra-frame encoding, in which all the local areas (which is defined by a group of MBs (GOMBs) in this paper) in the frame are encoded to have approximately the same perceptual quality. The SSIM index is used to measure the perceptual quality of the GOMBs. The experimental results show that the encoding performance on intra-frames can be improved greatly by the proposed method compared with the fixed-QP method. Furthermore, we show that the optimization on the intra-frame can bring benefits to the whole sequence encoding, since a better reference frame can improve the encoding of the subsequent frames. The proposed method has acceptable encoding complexity for offline applications.