  We consider the interaction of a two-level atom inside an optical parametric
oscillator. In the weak driving field limit, we essentially have an atom-cavity
system driven by the occasional pair of correlated photons, or weakly squeezed
light. We find that we may have holes, or dips, in the spectrum of the
fluorescent and transmitted light. This occurs even in the strong-coupling
limit when we find holes in the vacuum-Rabi doublet. Also, spectra with a
sub-natural linewidth may occur. These effects disappear for larger driving
fields, unlike the spectral narrowing obtained in resonance fluorescence in a
squeezed vacuum; here it is important that the squeezing parameter $N$ tends to
zero so that the system interacts with only one correlated pair of photons at a
time. We show that a previous explanation for spectral narrowing and spectral
holes for incoherent scattering is not applicable in the present case, and
propose a new explanation. We attribute these anomalous effects to quantum
interference in the two-photon scattering of the system.
