  Wave packet propagation in the basis of interpolating scaling functions (ISF)
is studied. The ISF are well known in the multiresolution analysis based on
spline biorthogonal wavelets. The ISF form a cardinal basis set corresponding
to an equidistantly spaced grid. They have compact support of the size
determined by the underlying interpolating polynomial that is used to generate
ISF. In this basis the potential energy matrix is diagonal and the kinetic
energy matrix is sparse and, in the 1D case, has a band-diagonal structure. An
important feature of the basis is that matrix elements of a Hamiltonian are
exactly computed by means of simple algebraic transformations efficiently
implemented numerically. Therefore the number of grid points and the order of
the underlying interpolating polynomial can easily be varied allowing one to
approach the accuracy of pseudospectral methods in a regular manner, similar to
high order finite difference methods. The results of numerical simulations of
an H+H_2 collinear collision show that the ISF provide one with an accurate and
efficient representation for use in the wave packet propagation method.
