diff --git a/lua/diffs/debug.lua b/lua/diffs/debug.lua
new file mode 100644
index 0000000..5be95bc
--- /dev/null
+++ b/lua/diffs/debug.lua
@@ -0,0 +1,68 @@
+local M = {}
+
+local ns = vim.api.nvim_create_namespace('diffs')
+
+function M.dump()
+  local bufnr = vim.api.nvim_get_current_buf()
+  local marks = vim.api.nvim_buf_get_extmarks(bufnr, ns, 0, -1, { details = true })
+  local lines = vim.api.nvim_buf_get_lines(bufnr, 0, -1, false)
+
+  local by_line = {}
+  for _, mark in ipairs(marks) do
+    local id, row, col, details = mark[1], mark[2], mark[3], mark[4]
+    local entry = {
+      id = id,
+      row = row,
+      col = col,
+      end_row = details.end_row,
+      end_col = details.end_col,
+      hl_group = details.hl_group,
+      priority = details.priority,
+      line_hl_group = details.line_hl_group,
+      number_hl_group = details.number_hl_group,
+      virt_text = details.virt_text,
+    }
+    if not by_line[row] then
+      by_line[row] = { text = lines[row + 1] or '', marks = {} }
+    end
+    table.insert(by_line[row].marks, entry)
+  end
+
+  local all_ns_marks = vim.api.nvim_buf_get_extmarks(bufnr, -1, 0, -1, { details = true })
+  local non_diffs = {}
+  for _, mark in ipairs(all_ns_marks) do
+    local details = mark[4]
+    if details.ns_id ~= ns then
+      table.insert(non_diffs, {
+        ns_id = details.ns_id,
+        row = mark[2],
+        col = mark[3],
+        end_row = details.end_row,
+        end_col = details.end_col,
+        hl_group = details.hl_group,
+        priority = details.priority,
+      })
+    end
+  end
+
+  local result = {
+    bufnr = bufnr,
+    buf_name = vim.api.nvim_buf_get_name(bufnr),
+    ns_id = ns,
+    total_diffs_marks = #marks,
+    total_all_marks = #all_ns_marks,
+    non_diffs_marks = non_diffs,
+    lines = by_line,
+  }
+
+  local state_dir = vim.fn.stdpath('state')
+  local path = state_dir .. '/diffs_debug.json'
+  local f = io.open(path, 'w')
+  if f then
+    f:write(vim.json.encode(result))
+    f:close()
+    vim.notify('[diffs.nvim] debug dump: ' .. path, vim.log.levels.INFO)
+  end
+end
+
+return M
diff --git a/lua/diffs/diff.lua b/lua/diffs/diff.lua
index 8dc836b..65d3ac8 100644
--- a/lua/diffs/diff.lua
+++ b/lua/diffs/diff.lua
@@ -312,13 +312,28 @@ function M.compute_intra_hunks(hunk_lines, algorithm)
   ---@type diffs.CharSpan[]
   local all_del = {}
 
-  for _, group in ipairs(groups) do
+  dbg(
+    'intra: %d change groups, algorithm=%s, vscode=%s',
+    #groups,
+    algorithm,
+    vscode_handle and 'yes' or 'no'
+  )
+
+  for gi, group in ipairs(groups) do
+    dbg('group %d: %d del lines, %d add lines', gi, #group.del_lines, #group.add_lines)
     local ds, as
     if vscode_handle then
       ds, as = diff_group_vscode(group, vscode_handle)
     else
       ds, as = diff_group_native(group)
     end
+    dbg('group %d result: %d del spans, %d add spans', gi, #ds, #as)
+    for _, s in ipairs(ds) do
+      dbg('  del span: line=%d col=%d..%d', s.line, s.col_start, s.col_end)
+    end
+    for _, s in ipairs(as) do
+      dbg('  add span: line=%d col=%d..%d', s.line, s.col_start, s.col_end)
+    end
     vim.list_extend(all_del, ds)
     vim.list_extend(all_add, as)
   end
diff --git a/lua/diffs/highlight.lua b/lua/diffs/highlight.lua
index 1eb16d7..311a6f3 100644
--- a/lua/diffs/highlight.lua
+++ b/lua/diffs/highlight.lua
@@ -287,7 +287,17 @@ function M.highlight_hunk(bufnr, ns, hunk, opts)
   local intra = nil
   local intra_cfg = opts.highlights.intra
   if intra_cfg and intra_cfg.enabled and #hunk.lines <= intra_cfg.max_lines then
+    dbg('computing intra for hunk %s:%d (%d lines)', hunk.filename, hunk.start_line, #hunk.lines)
     intra = diff.compute_intra_hunks(hunk.lines, intra_cfg.algorithm)
+    if intra then
+      dbg('intra result: %d add spans, %d del spans', #intra.add_spans, #intra.del_spans)
+    else
+      dbg('intra result: nil (no change groups)')
+    end
+  elseif intra_cfg and not intra_cfg.enabled then
+    dbg('intra disabled by config')
+  elseif intra_cfg and #hunk.lines > intra_cfg.max_lines then
+    dbg('intra skipped: %d lines > %d max', #hunk.lines, intra_cfg.max_lines)
   end
 
   ---@type table<integer, diffs.CharSpan[]>
@@ -324,21 +334,20 @@ function M.highlight_hunk(bufnr, ns, hunk, opts)
       })
     end
 
-    if opts.highlights.background and is_diff_line then
-      local extmark_opts = {
-        line_hl_group = line_hl,
-        priority = 198,
-      }
-      if opts.highlights.gutter then
-        extmark_opts.number_hl_group = number_hl
-      end
-      pcall(vim.api.nvim_buf_set_extmark, bufnr, ns, buf_line, 0, extmark_opts)
-    end
-
     if line_len > 1 and syntax_applied then
       pcall(vim.api.nvim_buf_set_extmark, bufnr, ns, buf_line, 1, {
         end_col = line_len,
         hl_group = 'Normal',
+        priority = 198,
+      })
+    end
+
+    if opts.highlights.background and is_diff_line then
+      pcall(vim.api.nvim_buf_set_extmark, bufnr, ns, buf_line, 0, {
+        end_col = line_len,
+        hl_group = line_hl,
+        hl_eol = true,
+        number_hl_group = opts.highlights.gutter and number_hl or nil,
         priority = 199,
       })
     end
@@ -346,11 +355,23 @@ function M.highlight_hunk(bufnr, ns, hunk, opts)
     if char_spans_by_line[i] then
       local char_hl = prefix == '+' and 'DiffsAddText' or 'DiffsDeleteText'
       for _, span in ipairs(char_spans_by_line[i]) do
-        pcall(vim.api.nvim_buf_set_extmark, bufnr, ns, buf_line, span.col_start, {
+        dbg(
+          'char extmark: line=%d buf_line=%d col=%d..%d hl=%s text="%s"',
+          i,
+          buf_line,
+          span.col_start,
+          span.col_end,
+          char_hl,
+          line:sub(span.col_start + 1, span.col_end)
+        )
+        local ok, err = pcall(vim.api.nvim_buf_set_extmark, bufnr, ns, buf_line, span.col_start, {
           end_col = span.col_end,
           hl_group = char_hl,
           priority = 201,
         })
+        if not ok then
+          dbg('char extmark FAILED: %s', err)
+        end
         extmark_count = extmark_count + 1
       end
     end
diff --git a/lua/diffs/init.lua b/lua/diffs/init.lua
index d2097b1..d80cd2e 100644
--- a/lua/diffs/init.lua
+++ b/lua/diffs/init.lua
@@ -183,8 +183,8 @@ local function compute_highlight_groups()
   local blended_add = blend_color(add_bg, bg, 0.4)
   local blended_del = blend_color(del_bg, bg, 0.4)
 
-  local blended_add_text = blend_color(add_fg, bg, 0.4)
-  local blended_del_text = blend_color(del_fg, bg, 0.4)
+  local blended_add_text = blend_color(add_fg, bg, 0.7)
+  local blended_del_text = blend_color(del_fg, bg, 0.7)
 
   vim.api.nvim_set_hl(0, 'DiffsAdd', { default = true, bg = blended_add })
   vim.api.nvim_set_hl(0, 'DiffsDelete', { default = true, bg = blended_del })
@@ -193,6 +193,15 @@ local function compute_highlight_groups()
   vim.api.nvim_set_hl(0, 'DiffsAddText', { default = true, bg = blended_add_text })
   vim.api.nvim_set_hl(0, 'DiffsDeleteText', { default = true, bg = blended_del_text })
 
+  dbg('highlight groups: Normal.bg=#%06x DiffAdd.bg=#%06x diffAdded.fg=#%06x', bg, add_bg, add_fg)
+  dbg(
+    'DiffsAdd.bg=#%06x DiffsAddText.bg=#%06x DiffsAddNr.fg=#%06x',
+    blended_add,
+    blended_add_text,
+    add_fg
+  )
+  dbg('DiffsDelete.bg=#%06x DiffsDeleteText.bg=#%06x', blended_del, blended_del_text)
+
   local diff_change = resolve_hl('DiffChange')
   local diff_text = resolve_hl('DiffText')
 
diff --git a/spec/highlight_spec.lua b/spec/highlight_spec.lua
index e870177..9b7e685 100644
--- a/spec/highlight_spec.lua
+++ b/spec/highlight_spec.lua
@@ -43,6 +43,11 @@ describe('highlight', function()
             enabled = false,
             max_lines = 200,
           },
+          intra = {
+            enabled = false,
+            algorithm = 'native',
+            max_lines = 500,
+          },
         },
       }
       if overrides then
@@ -322,7 +327,7 @@ describe('highlight', function()
       local extmarks = get_extmarks(bufnr)
       local has_diff_add = false
       for _, mark in ipairs(extmarks) do
-        if mark[4] and mark[4].line_hl_group == 'DiffsAdd' then
+        if mark[4] and mark[4].hl_group == 'DiffsAdd' then
           has_diff_add = true
           break
         end
@@ -355,7 +360,7 @@ describe('highlight', function()
       local extmarks = get_extmarks(bufnr)
       local has_diff_delete = false
       for _, mark in ipairs(extmarks) do
-        if mark[4] and mark[4].line_hl_group == 'DiffsDelete' then
+        if mark[4] and mark[4].hl_group == 'DiffsDelete' then
           has_diff_delete = true
           break
         end
@@ -388,7 +393,7 @@ describe('highlight', function()
       local extmarks = get_extmarks(bufnr)
       local has_line_hl = false
       for _, mark in ipairs(extmarks) do
-        if mark[4] and mark[4].line_hl_group then
+        if mark[4] and (mark[4].hl_group == 'DiffsAdd' or mark[4].hl_group == 'DiffsDelete') then
           has_line_hl = true
           break
         end
@@ -520,7 +525,7 @@ describe('highlight', function()
       local extmarks = get_extmarks(bufnr)
       local has_diff_add = false
       for _, mark in ipairs(extmarks) do
-        if mark[4] and mark[4].line_hl_group == 'DiffsAdd' then
+        if mark[4] and mark[4].hl_group == 'DiffsAdd' then
           has_diff_add = true
           break
         end
@@ -668,7 +673,7 @@ describe('highlight', function()
       local extmarks = get_extmarks(bufnr)
       local has_diff_add = false
       for _, mark in ipairs(extmarks) do
-        if mark[4] and mark[4].line_hl_group == 'DiffsAdd' then
+        if mark[4] and mark[4].hl_group == 'DiffsAdd' then
           has_diff_add = true
           break
         end
@@ -727,6 +732,295 @@ describe('highlight', function()
       assert.is_true(has_normal)
       delete_buffer(bufnr)
     end)
+
+    it('uses hl_group not line_hl_group for line backgrounds', function()
+      local bufnr = create_buffer({
+        '@@ -1,2 +1,1 @@',
+        '-local x = 1',
+        '+local y = 2',
+      })
+
+      local hunk = {
+        filename = 'test.lua',
+        lang = 'lua',
+        start_line = 1,
+        lines = { '-local x = 1', '+local y = 2' },
+      }
+
+      highlight.highlight_hunk(
+        bufnr,
+        ns,
+        hunk,
+        default_opts({ highlights = { background = true } })
+      )
+
+      local extmarks = get_extmarks(bufnr)
+      for _, mark in ipairs(extmarks) do
+        local d = mark[4]
+        if d and (d.hl_group == 'DiffsAdd' or d.hl_group == 'DiffsDelete') then
+          assert.is_true(d.hl_eol == true)
+          assert.is_nil(d.line_hl_group)
+        end
+      end
+      delete_buffer(bufnr)
+    end)
+
+    it('line bg priority > Normal priority', function()
+      local bufnr = create_buffer({
+        '@@ -1,2 +1,1 @@',
+        '-local x = 1',
+        '+local y = 2',
+      })
+
+      local hunk = {
+        filename = 'test.lua',
+        lang = 'lua',
+        start_line = 1,
+        lines = { '-local x = 1', '+local y = 2' },
+      }
+
+      highlight.highlight_hunk(
+        bufnr,
+        ns,
+        hunk,
+        default_opts({ highlights = { background = true } })
+      )
+
+      local extmarks = get_extmarks(bufnr)
+      local normal_priority = nil
+      local line_bg_priority = nil
+      for _, mark in ipairs(extmarks) do
+        local d = mark[4]
+        if d and d.hl_group == 'Normal' then
+          normal_priority = d.priority
+        end
+        if d and (d.hl_group == 'DiffsAdd' or d.hl_group == 'DiffsDelete') then
+          line_bg_priority = d.priority
+        end
+      end
+      assert.is_not_nil(normal_priority)
+      assert.is_not_nil(line_bg_priority)
+      assert.is_true(line_bg_priority > normal_priority)
+      delete_buffer(bufnr)
+    end)
+
+    it('char-level extmarks have higher priority than line bg', function()
+      vim.api.nvim_set_hl(0, 'DiffsAddText', { bg = 0x00FF00 })
+      vim.api.nvim_set_hl(0, 'DiffsDeleteText', { bg = 0xFF0000 })
+
+      local bufnr = create_buffer({
+        '@@ -1,2 +1,2 @@',
+        '-local x = 1',
+        '+local x = 2',
+      })
+
+      local hunk = {
+        filename = 'test.lua',
+        lang = 'lua',
+        start_line = 1,
+        lines = { '-local x = 1', '+local x = 2' },
+      }
+
+      highlight.highlight_hunk(
+        bufnr,
+        ns,
+        hunk,
+        default_opts({
+          highlights = {
+            background = true,
+            intra = { enabled = true, algorithm = 'native', max_lines = 500 },
+          },
+        })
+      )
+
+      local extmarks = get_extmarks(bufnr)
+      local line_bg_priority = nil
+      local char_bg_priority = nil
+      for _, mark in ipairs(extmarks) do
+        local d = mark[4]
+        if d and (d.hl_group == 'DiffsAdd' or d.hl_group == 'DiffsDelete') then
+          line_bg_priority = d.priority
+        end
+        if d and (d.hl_group == 'DiffsAddText' or d.hl_group == 'DiffsDeleteText') then
+          char_bg_priority = d.priority
+        end
+      end
+      assert.is_not_nil(line_bg_priority)
+      assert.is_not_nil(char_bg_priority)
+      assert.is_true(char_bg_priority > line_bg_priority)
+      delete_buffer(bufnr)
+    end)
+
+    it('creates char-level extmarks for changed characters', function()
+      vim.api.nvim_set_hl(0, 'DiffsAddText', { bg = 0x00FF00 })
+      vim.api.nvim_set_hl(0, 'DiffsDeleteText', { bg = 0xFF0000 })
+
+      local bufnr = create_buffer({
+        '@@ -1,2 +1,2 @@',
+        '-local x = 1',
+        '+local x = 2',
+      })
+
+      local hunk = {
+        filename = 'test.lua',
+        lang = 'lua',
+        start_line = 1,
+        lines = { '-local x = 1', '+local x = 2' },
+      }
+
+      highlight.highlight_hunk(
+        bufnr,
+        ns,
+        hunk,
+        default_opts({
+          highlights = { intra = { enabled = true, algorithm = 'native', max_lines = 500 } },
+        })
+      )
+
+      local extmarks = get_extmarks(bufnr)
+      local add_text_marks = {}
+      local del_text_marks = {}
+      for _, mark in ipairs(extmarks) do
+        local d = mark[4]
+        if d and d.hl_group == 'DiffsAddText' then
+          table.insert(add_text_marks, mark)
+        end
+        if d and d.hl_group == 'DiffsDeleteText' then
+          table.insert(del_text_marks, mark)
+        end
+      end
+      assert.is_true(#add_text_marks > 0)
+      assert.is_true(#del_text_marks > 0)
+      delete_buffer(bufnr)
+    end)
+
+    it('does not create char-level extmarks when intra disabled', function()
+      local bufnr = create_buffer({
+        '@@ -1,2 +1,2 @@',
+        '-local x = 1',
+        '+local x = 2',
+      })
+
+      local hunk = {
+        filename = 'test.lua',
+        lang = 'lua',
+        start_line = 1,
+        lines = { '-local x = 1', '+local x = 2' },
+      }
+
+      highlight.highlight_hunk(
+        bufnr,
+        ns,
+        hunk,
+        default_opts({
+          highlights = { intra = { enabled = false, algorithm = 'native', max_lines = 500 } },
+        })
+      )
+
+      local extmarks = get_extmarks(bufnr)
+      for _, mark in ipairs(extmarks) do
+        local d = mark[4]
+        assert.is_not_equal('DiffsAddText', d and d.hl_group)
+        assert.is_not_equal('DiffsDeleteText', d and d.hl_group)
+      end
+      delete_buffer(bufnr)
+    end)
+
+    it('does not create char-level extmarks for pure additions', function()
+      vim.api.nvim_set_hl(0, 'DiffsAddText', { bg = 0x00FF00 })
+
+      local bufnr = create_buffer({
+        '@@ -1,0 +1,2 @@',
+        '+local x = 1',
+        '+local y = 2',
+      })
+
+      local hunk = {
+        filename = 'test.lua',
+        lang = 'lua',
+        start_line = 1,
+        lines = { '+local x = 1', '+local y = 2' },
+      }
+
+      highlight.highlight_hunk(
+        bufnr,
+        ns,
+        hunk,
+        default_opts({
+          highlights = { intra = { enabled = true, algorithm = 'native', max_lines = 500 } },
+        })
+      )
+
+      local extmarks = get_extmarks(bufnr)
+      for _, mark in ipairs(extmarks) do
+        local d = mark[4]
+        assert.is_not_equal('DiffsAddText', d and d.hl_group)
+        assert.is_not_equal('DiffsDeleteText', d and d.hl_group)
+      end
+      delete_buffer(bufnr)
+    end)
+
+    it('enforces priority order: Normal < line bg < syntax < char bg', function()
+      vim.api.nvim_set_hl(0, 'DiffsAddText', { bg = 0x00FF00 })
+      vim.api.nvim_set_hl(0, 'DiffsDeleteText', { bg = 0xFF0000 })
+
+      local bufnr = create_buffer({
+        '@@ -1,2 +1,2 @@',
+        '-local x = 1',
+        '+local x = 2',
+      })
+
+      local hunk = {
+        filename = 'test.lua',
+        lang = 'lua',
+        start_line = 1,
+        lines = { '-local x = 1', '+local x = 2' },
+      }
+
+      highlight.highlight_hunk(
+        bufnr,
+        ns,
+        hunk,
+        default_opts({
+          highlights = {
+            background = true,
+            intra = { enabled = true, algorithm = 'native', max_lines = 500 },
+          },
+        })
+      )
+
+      local extmarks = get_extmarks(bufnr)
+      local priorities = { normal = {}, line_bg = {}, syntax = {}, char_bg = {} }
+      for _, mark in ipairs(extmarks) do
+        local d = mark[4]
+        if d then
+          if d.hl_group == 'Normal' then
+            table.insert(priorities.normal, d.priority)
+          elseif d.hl_group == 'DiffsAdd' or d.hl_group == 'DiffsDelete' then
+            table.insert(priorities.line_bg, d.priority)
+          elseif d.hl_group == 'DiffsAddText' or d.hl_group == 'DiffsDeleteText' then
+            table.insert(priorities.char_bg, d.priority)
+          elseif d.hl_group and d.hl_group:match('^@.*%.lua$') then
+            table.insert(priorities.syntax, d.priority)
+          end
+        end
+      end
+
+      assert.is_true(#priorities.normal > 0)
+      assert.is_true(#priorities.line_bg > 0)
+      assert.is_true(#priorities.syntax > 0)
+      assert.is_true(#priorities.char_bg > 0)
+
+      local max_normal = math.max(unpack(priorities.normal))
+      local min_line_bg = math.min(unpack(priorities.line_bg))
+      local min_syntax = math.min(unpack(priorities.syntax))
+      local min_char_bg = math.min(unpack(priorities.char_bg))
+
+      assert.is_true(max_normal < min_line_bg)
+      assert.is_true(min_line_bg < min_syntax)
+      assert.is_true(min_syntax < min_char_bg)
+      delete_buffer(bufnr)
+    end)
   end)
 
   describe('diff header highlighting', function()