  Observations of the extraordinarily bright optical afterglow (OA) of GRB
991208 started 2.1 d after the event. The flux decay constant of the OA in the
R-band is -2.30 +/- 0.07 up to 5 d, which is very likely due to the jet effect,
and after that it is followed by a much steeper decay with constant -3.2 +/-
0.2, the fastest one ever seen in a GRB OA. A negative detection in several
all-sky films taken simultaneously to the event implies either a previous
additional break prior to 2 d after the occurrence of the GRB (as expected from
the jet effect). The existence of a second break might indicate a steepening in
the electron spectrum or the superposition of two events. Once the afterglow
emission vanished, contribution of a bright underlying SN is found, but the
light curve is not sufficiently well sampled to rule out a dust echo
explanation. Our determination of z = 0.706 indicates that GRB 991208 is at 3.7
Gpc, implying an isotropic energy release of 1.15 x 10E53 erg which may be
relaxed by beaming by a factor > 100. Precise astrometry indicates that the GRB
coincides within 0.2" with the host galaxy, thus given support to a massive
star origin. The absolute magnitude is M_B = -18.2, well below the knee of the
galaxy luminosity function and we derive a star-forming rate of 11.5 +/- 7.1
Mo/yr. The quasi-simultaneous broad-band photometric spectral energy
distribution of the afterglow is determined 3.5 day after the burst (Dec 12.0)
implying a cooling frequency below the optical band, i.e. supporting a jet
model with p = -2.30 as the index of the power-law electron distribution.
