We analyse a novel squeezing and entangling mechanism which is due to correlated Stokes and anti-Stokes photon forward scattering in a multi-level atom vapour. Following the proposal we present an experimental demonstration of 3.5 dB pulsed frequency nondegenerate squeezed (quadrature entangled) state of light using room temperature caesium vapour. The source is very robust and requires only a few milliwatts of laser power. The squeezed state is generated in the same spatial mode as the local oscillator and in a single temporal mode. The two entangled modes are separated by twice the Zeeman frequency of the vapour which can be widely tuned. The narrow-band squeezed light generated near an atomic resonance can be directly used for atom-based quantum information protocols. Its single temporal mode characteristics make it a promising resource for quantum information processing.
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