Photodissociation of I-2 in the I2Ar17 cluster is studied by quantum wavepacket simulations, using time-dependent mean-field potentials. It is found that: (a) Initial energy transfer from the 12 is Mostly to three cluster modes, which undergo multiquantum excitation. Several other modes undergo single-quantum excitation. (b) Coherent phase transfer from the 12 to specific cluster modes is found. (c) Energy transfer from initially-excited modes to the other modes becomes large after 0.6 ps. Phase space interpretation is provided by computed Wigner distributions in time. (c) 2006 Elsevier B.V. All rights reserved.