We investigate a model of two Kondo impurities coupled via an Ising interaction. Exploiting the mapping to a generalized single-impurity Anderson model, we establish that the model has a singlet and a (pseudospin) doublet phase separated by a Kosterlitz-Thouless quantum phase transition. Based on a strong-coupling analysis and renormalization-group arguments, we show that at this transition the conductance $G$ through the system either displays a zero-bias anomaly, $G\ensuremath{\sim}{\ensuremath{\mid}V\ensuremath{\mid}}^{\ensuremath{-}2(\sqrt{2}\ensuremath{-}1)}$, or takes a universal value, $G=({e}^{2}∕\ensuremath{\pi}\ensuremath{\hbar}){\mathrm{cos}}^{2}(\ensuremath{\pi}∕2\sqrt{2})$, depending on the experimental setup. Close to the Toulouse point of the individual Kondo impurities, the strong-coupling analysis allows us to obtain the location of the phase boundary analytically. For general model parameters, we determine the phase diagram and investigate the thermodynamics using numerical renormalization-group calculations. In the singlet phase close to the quantum phase transition, the entropy is quenched in two steps: first the two Ising-coupled spins form a magnetic minidomain which is, in a second step, screened by a Kondoesque collective resonance in an effective solitonic Fermi sea. In addition, we present a flow-equation analysis which provides a different mapping of the two-impurity model to a generalized single-impurity Anderson model in terms of fully renormalized couplings, which is applicable for the whole range of model parameters.
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