We derive an effective two-photon Hamiltonian for a collection of two-level
atoms interacting with a quantized field in the regime of two-photon reson
ance. This Hamiltonian naturally includes the dynamical Stark shift terms.
Considering, in detail, the case of an initially strong quantum field, we s
how that the effective Hamiltonian acquires nonlinear terms in the su(2) al
gebra generators. For this case we find the evolution operator and prove th
e wavefunction factorization for special initial states. We show that colle
ctive effects modify the dynamics of the atomic inversion leading to a modu
lation of the collapse-revival structure.