In this paper, an interpolatory subdivision algorithm for surfaces over ar-bitrary triangulations is introduced and its convergence properties over nonuni-form triangulations studied. The so called Butterfly Scheme (interpolatory) is a special case of this algorithm. In our analysis of the algorithm over uniform triangulations, a matrix approach is employed and the idea, of "Cross Differ-ence of Directional Divided Difference" analysis is presented. This method is a generalization of the technique used by Dyn, Gregory and Levin etc. to analyse univariate subdivision algorithms. While for nonuniform data, an extraordi-nary point analysis is introduced and the local subdivision matrix analysis is presented. It is proved that the algorithm produces smooth surfaces over ar-bitrary triangular networks provided the shape parameters are kept within an appropriate range
