We analyze the effect of environment on the gate operation of flux-biased phase qubits. We employ the master equation for a reduced density matrix of the qubit system coupled to an Ohmic environment, described by the Caldeira-Leggett model. Numerically solving this equation, we evaluate the gate error as a function of energy splitting between qubit states, junction capacitance, and temperature. The analysis is presented for single-quadrature microwave (control) pulses as well as for

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... re pulses, which lower the gate error significantly for idealized systems in the absence of environment. Our results indicate that two-quadrature pulses outperform single quadrature pulses even in the presence of environment.