We study the generation of atomic-squeezed states in an optical cavity. The cavity encloses a pair of two-level atoms and is coupled to a broadband squeezed vacuum. Using the bad-cavity limit, cavity field is adiabatically eliminated to obtain the equations of motion for collective atomic operators. These equations are then employed to obtain the atomic density-matrix elements and to study the generation of atomic-squeezed states in the steady state. To characterize atomic-squeezed states we use the squeezing parameter defined recently by Wineland et al. [Phys. Rev. A 46, 6797 (1992)] for spectroscopic purposes. The aforementioned parameter is also compared with the squeezing parameter obtained from the uncertainty principle satisfied by the collective atomic operators. We show that in a cavity arrangement, unlike free space, atomic-squeezed states can be generated only for a restricted range of values of the parameters \ensuremath{\lambda} and N which characterize the cavity and the squeezed field driving the cavity, respectively. \textcopyright{} 1996 The American Physical Society.
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