How can I make a JPEG look smoother ?

[Yovav]

Dear all,

After I create a thumbnail picture (from a bigger one) it become too sharp and looks bad - you can see the small pixels even when I use JPEG's highest quality...

I guess I need to make it smoother in order to look better (am I right ???)

Anyone has an idea / link for me ?

Thanks in advance, Yovav.