The drawbacks of the current authentication watermarking schemes for JPEG images, which are inferior localization and the security flaws, are firstly analyzed in this paper. Then, two counterfeiting attacks are conducted on them. To overcome these drawbacks, a new digital authentication watermarking scheme for JPEG images with superior localization and security is proposed. Moreover, the probabilities of tamper detection and false detection are deduced under region tampering and collage attack separately. For each image block, the proposed scheme keeps four middle frequency points fixed to embed the watermark, and utilizes the rest of the DCT coefficients to generate 4 bits of watermark information. During the embedding process, each watermark bit is embedded in another image block that is selected by its corresponding secret key. Since four blocks are randomly selected for the watermark embedding of each block, the non-deterministic dependence among the image blocks is established so as to resist collage attack completely. At the receiver, according to judging of the extracted 4 bits of watermark information and the corresponding 9-neighbourhood system, the proposed scheme could discriminate whether the image block is tampered or not. Owing to the diminishing of false detection and the holding of tamper detection, we improve the accuracy of localization in the authentication process. Theoretic analysis and simulation results have proved that the proposed algorithm not only has superior localization, but also enhances the systematic security obviously.