  We analyze the indirect exchange interaction between two two-state systems,
e.g., spins 1/2, subject to a common finite-temperature environment modeled by
bosonic modes. The environmental modes, e.g., phonons or cavity photons, are
also a source of quantum noise. We analyze the coherent vs noise-induced
features of the two-spin dynamics and predict that for low enough temperatures
the induced interaction is coherent over time scales sufficient to create
entanglement. A nonperturbative approach is utilized to obtain an exact
solution for the onset of the induced interaction, whereas for large times, a
Markovian scheme is used. We identify the time scales for which the spins
develop entanglement for various spatial separations. For large enough times,
the initially created entanglement is erased by quantum noise. Estimates for
the interaction and the level of quantum noise for localized impurity electron
spins in Si-Ge type semiconductors are given.
