Yes you can very well configure MPLS switching with a 2 label stack on an FE interface.
You can define the Edge/CE offered MTU + 4 bytes per label i:e in your case 1508 as the MPLS MTU. This will enable the frame to be fragmented but still the fragments retain the original label mapping.
Caveat: If you edges have a DF bit set at any time then the process fails as there cannot be any fragmentation, this is when you will need interfaces which are Core Class, supporting larger configurable MTU's.
If i use "MPLS MTU 1500" command on PE interface that is connected to MPLS cloud and CE send a packet with MTU size larger than 1500 , will PE defragment this packet (If DF is not set) prior to transmission out of the outbound intarface ? and all the packets entering MPLS cloud will have 1500 MTU with 2 label added ?
I faced the same problem. PE (3640 router) is connected to MPLS cloud with FE interface. Some applications working behind 3640 router needs to not fragmented. So I can try yo write "ip mtu 1600", however it can only adjust to 1500.
I would think that if the maximum physical interface mtu supported in your case is 1500, then you'd want to set the ip mtu to some multiple of 4 less than that, to allow for 2 or more mpls labels on top of the IP packet.
So wouldn't it be more correct, under the FastEthernet interface, to do something like so?
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