In this work, a new Multistage multiple image encryption using a combination of a 2-round Chaotic Block Cipher and Iterative Fractional Fourier Transform method is proposed. The Chaotic Block Cipher uses a logistic map to generate chaotic numbers and the Iterative Fractional Fourier Transform block is used to combine two images with phase of the images and the fractional orders as keys. The proposed algorithm consists of N stages to encrypt N different input images into a single final encrypted image. The performance of the proposed algorithm is evaluated using various types of analysis such as histogram analysis, correlation analysis, mean square error analysis and key sensitivity analysis. The results indicate that the proposed algorithm is highly secure and occupies less space while transmitting the encrypted data through the network as all the N images are encrypted into a single image of the same size as that of the input images.