  We use the N-quantum approach (NQA) to quantum field theory to construct a
solution of the two flavor effective instanton induced `t Hooft interaction
model valid for any temperature (T) and chemical potential ($\mu$) beyond the
mean field theory. The model contains only the $\bar{q}q$ channels. In
constructing this solution we calculate the masses, widths and coupling
constants of bound $\sigma$ and resonant color $\bar{3}$ scalar diquark states.
We find that the chemical potential induced by the interaction cancel exactly
for all values of T in contrast to the Nambu-Jona-Lasinio model. Our method can
also be extended to include the qq channels in the model Lagrangian and we
discuss how the NQA can be used to study the properties of bound diquark states
at finite T and $\mu$.
