Distributions of in-plane displacement vectors and strain of a laser illuminated diffuse surface are obtained by detecting a distribution of speckle displacement at its image plane. The speckle displacement is determined from the peak position of two dimensional cross-correlation function of the intensity distribution taken by a CCD camera and divided into many subblocks in a computer. First speckle displacement due to general surface deformation is derived theoretically for an imaging system including oblique observation. It is shown that speckle displacement at the gaussian image plane is proportional to object displacement transverse to the optical axis. In experiments in-plane displacement distribution of a plane metal specimen subject to extension is examined. Resolution of displacement is improved by subpixel interpolation of the peak, while range of measurement is extended by integrating small displacements before serious speckle decorrelation. The resolution in displacement and strain are several micrometers and several hundreds of microstrains, respectively. The measurement range is extended up to plastic strain.