Abstract
We analyze a nondegenerate three-level cascade laser coupled to a two-mode vacuum reservoir employing the stochastic differential equations associated with the normal ordering. We study the squeezing properties and entanglement amplification of the cavity radiation. We also calculate the correlation of the photon numbers and the fluctuations of the intensity difference. It turns out that the generated light exhibits a two-mode squeezing and entanglement when initially there are more atoms in the lower level. Moreover, a strong correlation between photon numbers along with a significant fluctuation in the intensity difference is found.