  We study the effect of Coulomb correlations on the ultrafast optical dynamics
of small metal particles. We demonstrate that a surface-induced dynamical
screening of the electron-electron interactions leads to quasiparticle
scattering with collective surface excitations. In noble-metal nanoparticles,
it results in an interband resonant scattering of d-holes with surface
plasmons. We show that this size-dependent many-body effect manifests itself in
the differential absorption dynamics for frequencies close to the surface
plasmon resonance. In particular, our self-consistent calculations reveal a
strong frequency dependence of the relaxation, in agreement with recent
femtosecond pump-probe experiments.
