  We consider a single Rydberg atom having two degenerate levels interacting
with the radiation field in a single-mode ideal cavity. The transition between
the levels is carried out by a $\Lambda$-type degenerate two-photon process via
a third level far away from single-photon resonance. At the start of
interaction, the atom is considered to be in a coherent superposition of its
two levels and the field in a coherent state. We study the dynamics of the
atomic as well as the field states. The squeezing in the quadratures of atomic
states can reach up to $100\%$. The cavity field evolves to a statistical
mixture of two coherent fields with the phase difference between them decided
by the interaction time. Analysis of entropies of the atom and the field shows
that the two systems are dis-entangled periodically in certain cases.
