We consider the discrete Knizhnik-Zamolodchikov connection (qKZ) assoc
iated to gl(N), defined in terms of rational R-matrices. We prove that
under certain resonance conditions, the qKZ connection has a non-triv
ial invariant subbundle which we call the subbundle of quantized confo
rmal blocks. The subbundle is given explicitly by algebraic equations
in terms of the Yangian Y(gl(N)) action. The subbundle is a deformatio
n of the subbundle of conformal blocks in CFT. The proof is based on a
n identity in the algebra with two generators x, y and defining relati
on xy = yx + yy.