On the basis of signed-digit negabinary representation, parallel two-step addition and one-step subtraction can be performed for arbitrary-length negabinary operands. The arithmetic is realized by signed logic operations and optically implemented by spatial encoding and decoding techniques. The proposed algorithm and optical system are simple, reliable, and practicable, and they have the property of parallel processing of two-dimensional data. This leads to an efficient design for the optical arithmetic and logic unit.