We report on the first observation of Rabi oscillations of continuum t
ransitions in semiconductors, employing two-color transmission spectro
scopy with a time resolution of 10 fs. Up to two Rabi cycles are obser
ved in bulk InP for peak intensities exceeding 4 GW/cm(2). Extremely f
ast phase relaxation due to carrier-carrier scattering results in a st
rong damping of the oscillations. Surprisingly, the measurements clear
ly show a decrease of the dephasing rates during the excitation pulse.
We attribute this phenomenon to an increase of Pauli blocking and pos
sibly the build-up of screening.