Testing of VLSI circuits is challenged by the increasing volume of test data that adds constraints on tester memory and impacts test application time substantially. Space compactors are commonly used to reduce the test volume by one or two orders of magnitude. However, such level of compaction reduces the quality of the diagnostic of faults because it is difficult to identify the locations of errors in the compacted response. In this paper, we introduce a design of space compactors that can be used in pass/fail mode as well as in diagnostic mode with enhanced performance by trading off compaction ratio for diagnostic ability. We analyze the properties of the compactors and evaluate their performance through simulations.