In this paper, an interpolatory subdivision algorithm for surfaces over arbitrary triangulations is introduced and its properties over uniform triangulations studied. The Butterfly Scheme, which is introduced by Dyn, Gregory and Levin is a special case of this algorithm. In our analysis, the matrix approach is employed and the idea of "Cross Difference 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. It is proved that the algorithm produces smooth surfaces provided the shape parameters are kept within an appropriate range
