  We develop an approach to generate finite-range atomic interactions via
optical Rydberg-state excitation and study the underlying excitation dynamics
in theory and experiment. In contrast to previous work, the proposed scheme is
based on resonant optical driving and the establishment of a dark state under
conditions of electromagnetically induced transparency (EIT). Analyzing the
driven dissipative dynamics of the atomic gas, we show that the interplay
between coherent light coupling, radiative decay and strong Rydberg-Rydberg
atom interactions leads to the emergence of sizeable effective interactions
while providing remarkably long coherence times. The latter are studied
experimentally in a cold gas of strontium atoms for which the proposed scheme
is most efficient. Our measured atom loss is in agreement with the theoretical
prediction based on binary effective interactions between the driven atoms.
