In the present study, two dimensional squeeze flow of newtonian fluid with free surface between parallel plates bonded elastic sheets separated at a constant velocity is investigated. Multiphase flow analysis program based on fractional step method, the constrained interpolation profile (CIP) method and projection method is developed, and the motion of free surface taken into account of the elastic deformation of sheets is simulated. The continuum surface force (CSF) model is used to calculate surface tension. Color function identifies a liquid-gas interface. Fluid-structure interaction is calculated using the immersed boundary method. CIP Digitizer method is applied for capturing the moving interface.