  In order to implement fault-tolerant quantum computation, entanglement
generation with low error probability and high success probability is required.
We have proposed the use of squeezed coherent light as a probe to generate
entanglement between two atoms by communication, and shown that the error
probability is reduced well below the threshold of fault-tolerant quantum
computation [Phys. Rev. A. {\bf 88}, 022313 (2013)]. Here, we investigate the
effect of photon loss mainly due to finite coupling efficiency to the cavity.
The error probability with the photon loss is calculated by the beam-splitter
model for homodyne measurement on probe light. Optimum condition on the
amplitude of probe light to minimize the error probability is examined. It is
shown that the phase-squeezed probe light yields lower error probability than
coherent-light probe. A fault-tolerant quantum computation algorithm can be
implemented under 0.59 dB loss by concatenating five-qubit error correction
code.
