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ABSTRACT: We describe a generalization of the cluster-state model of quantum computation to continuous-variable systems, along with a proposal for an optical implementation using squeezed-light sources, linear optics, and homodyne detection. For universal quantum computation, a nonlinear element is required. This can be satisfied by adding to the toolbox any single-mode non-Gaussian measurement, while the initial cluster state itself remains Gaussian. Homodyne detection alone suffices to perform an arbitrary multimode Gaussian transformation via the cluster state. We also propose an experiment to demonstrate cluster-based error reduction when implementing Gaussian operations.