We show that the anharmonic decay of large-amplitude coherent phonons in a solid generates strongly enhanced squeezing of the phonon modes near points of the Brillouin zone where energy conservation in the three-phonon decay process is satisfied. The squeezing process leads to temporal oscillations of the mean-square displacement of target modes in resonance with the coherent phonon, which are characteristic of coherent phonon decay and do not occur in the decay of a phonon in a well-defined number state. For realistic material parameters of optically excited group-V semimetals, we predict that this squeezing results in strongly enhanced oscillations of the x-ray diffuse scattering intensity at sharply-defined values of the x-ray momentum transfer. Numerical simulations of the phonon dynamics and x-ray diffuse scattering in optically-excited bismuth, using harmonic and anharmonic force parameters calculated with constrained density functional theory, demonstrate oscillations of the diffuse scattering intensity of magnitude 10-20% of the thermal background at points of the Brillouin zone, where resonance occurs. Such oscillations should be observable using time-resolved optical-pump/x-ray-probe facilities available at current x-ray free-electron laser sources.PACS numbers: 63.20.kg, 63.20.dk, 78.70.Ck The effect of mode coupling in strongly anharmonic materials has long been of interest, with important consequences for thermal transport and thermalization of energy within the vibrational modes [1]. The anharmonic decay of vibrational modes has been qualitatively understood in terms of quantum perturbation theory for many decades [2] and in more recent times, accurate quantitative calculations of phonon decay rates, based on density functional theory, have been possible [3]. It has been pointed out [4] that higher-order correlations of the phonon modes during the quantum decay process of a coherent phonon at very low temperature could in principle create squeezed quantum states, although substantial difficulties were envisaged in the detection of such squeezed states.We show in this paper that significant non-trivial correlated dynamics occur in the target modes (decay products) at high temperature during anharmonic decay of a coherent phonon -in particular, the target modes of the decay process exhibit squeezed phonon dynamics in this regime, generated in a process analogous to classical parametric resonance [5]. From simulations of the decay of the photo-excited coherent A 1g mode in bismuth, we show that such resonant squeezing of modes causes oscillations of the x-ray diffuse scattering in some regions of the Brillouin zone, which are of the order of 10-20% of the room-temperature diffuse thermal background, and should be directly observable using time-resolved x-ray diffuse scattering [6]. Although mode squeezing is often viewed as a primarily quantum phenomenon [7,8], this effect is by no means confined to the quantum regime [9] and we suggest a broader physical regime of phonon motion, in which squeezing...