  We show that optically encoded two-qubit Bell states can be unambiguously
discriminated with a success probability of more than 50% in both single-rail
and dual-rail encodings by using active linear-optical resources that include
Gaussian squeezing operations. These results are in contrast to the well-known
upper bound of 50% for unambiguous discrimination of dual-rail Bell states
using passive, static linear optics and arbitrarily many vacuum modes. We
present experimentally feasible schemes that improve the success probability to
64.3% in dual-rail and to 62.5% in single-rail for a uniform random
distribution of Bell states. Conceptually, this demonstrates that neither
interactions that induce nonlinear mode transformations (such as Kerr
interactions) nor auxiliary entangled photons are required to go beyond the
one-half limit. We discuss the optimality of our single-rail scheme, and talk
about an application of our dual-rail scheme in quantum communication.
