We report a compact, low cost, multi-color diode laser based illumination system for display and laser-projectors. An innovative speckle reduction system based on spatially structured and temporally varying beams was designed and developed. Three primary color lasers were efficiently combined and then made incident onto electromechanically controlled diffractive optical elements. This system splits a single laser beam to multiple moving beams, thus realizing the spatial, angular and temporal diversity simultaneously. Multiple moving beams are made incident onto a large diameter plano-convex lens. Thus, collecting most of the scattered light and focused on the input of the multimode fiber bundle (MMFB). A compact electrical vibrator was developed to vibrate MMFB. The entire system was realized for speckle reduction significantly with the combined effect of spatial, temporal, angular and wavelength diversity. Experimental results of speckle reduction and speckle free imaging are presented. We found that with our system the laser speckle contrast was reduced from 0.65 to 0.02 which is an order of magnitude speckle reduction. CIE color coordinates (x, y ) value of this white light source was (0.333, 0.332) and CCT was 5461 K. RGB colour ratio was 75.3: 23.3: 1.4. The developed system may find application for speckle free projection imaging, quantitative phase microscopy and holography.