  Cluster states serve as the central physical resource for the
measurement-based quantum computation. We here present a simple experimental
demonstration of the scalable cluster-state-construction scheme proposed by
Browne and Rudolph. In our experiment, three-photon cluster states are created
from two Bell states using linear optical devices. By observing a violation of
three-particle Mermin inequality of $|< \textit{A}>| = 3.10\pm0.03 $, we also
for the first time report a genuine three-photon entanglement. In addition, the
entanglement properties of the cluster states are examined under $\sigma_z$ and
$\sigma_x$ measurements on a qubit.
