We study the effect of interparticle interaction U on the spectrum of
the Harper model and show that it leads to a pure-point component aris
ing from the multifractal spectrum of the noninteracting problem. Our
numerical studies allow us to understand the global structure of the s
pectrum. An analytical approach developed permits us to understand the
origin of localized states in the limit of strong interaction U and f
ine spectral structure for small U.