Index: imageapi_gd.module
===================================================================
--- imageapi_gd.module	(revision 15251)
+++ imageapi_gd.module	(working copy)
@@ -271,7 +271,12 @@
  *   A GD image handle.
  */
 function imageapi_gd_create_tmp($image, $width, $height) {
-  $res = imagecreatetruecolor($width, $height);
+  if ($image->info['extension'] == 'gif') {
+    $res = imagecreate($width, $height);
+  }
+  else {
+    $res = imagecreatetruecolor($width, $height);
+  }
 
   if ($image->info['extension'] == 'gif') {
     // Grab transparent color index from image resource.