  We have studied the three-band Peierls-Hubbard model describing the Cu-O
layers in high-T$_c$ superconductors by using Lanczos diagonalization and
assuming infinite mass for the ions. When the system is doped with one hole,
and when the electron-lattice coupling is greater than a critical value, we
found that the oxygens around one Cu contract and the hole self-traps forming a
lattice and electronic small polaron. The self-trapped hole forms a local
singlet analogous to the Zhang-Rice singlet in the undeformed lattice. We also
studied the single-particle spectral function and the optical conductivity. We
have found that the spectral weight, in general, is similar to that found in
previous studies where the coupling with the lattice was absent. There is an
anomalous transfer of spectral but, contrary to those studies, it goes to these
localized polaronic states. However, this polaronic shift does not seem enough
by itself to explain the pinning of the chemical potential observed in real
materials. We compare our results to those obtained in inhomogeneous
Hartree-Fock calculations and we discuss their relation with experiments.
