Yes, if you are directly connected to your remote peer, you don't need
this.  If you have a serial link with this person and both of you have one
ip address of a /30 subnet, then you could just specify his serial ip
address for your neighbor statements, and he could specify your serial ip
address
for his neighbor statements.  An example of when you would use
'update-source' would be if he had 3 serial links to you and wants to
load-balance and run bgp.  In this case, it would be a good idea to run
bgp from both of your loopbacks (reference his loopback address in your
neighbor
statements and vice versa) and set a static route for his loopback address 
out each one of your serial interfaces towards him.  Now, you would need
to specify
that the bgp updates will be coming from your loopback address.  So, in
this
scenario you would need to specify 'update-source loopback0'.

hope this helps

On Wed, 14 Feb 2001, Khalid Jiwani wrote:

> So if I am directly connected to remoter peer, I dont
> need this command ? 
> 
> I tried to find out the significance of this command
> and the only thing I could find was that " it
> specifies the interface to be used as a source IP
> address of the BGP session with the neighbor". Could
> someone furthur elobarate this ?
> 
> 
> --- Ahmed Aden <[EMAIL PROTECTED]> wrote:
> > 
> > Khalid
> > 
> > 
> >  If this command is going to be entered by your
> > peer, then it
> > should be
> > your ip address for x.x.x.x in 'neighbor x.x.x.x
> > update-source <the
> > interface he wants the updates to originate from>'. 
> > This is for ebgp
> > multihop, when you don't have a bgp session with him
> > off a directly
> > connected
> > interface (like when both of you are at each end of
> > a serial
> > interface).  Think of it like this; you can't be
> > your own neighbor, your
> > neighbor statements always reference the other guy
> > and likewise for him.
> > 
> > 
> > On Wed, 14 Feb 2001, Khalid Jiwani wrote:
> > 
> > > Hi everyone:
> > > 
> > > If I am establishing an EBGP session with a remote
> > > router, what should be the ip address in the
> > command "
> > > neighbor update-source" of remote peer ? my IP
> > address
> > > or his own IP ?  ( Remote neighbor is using me for
> > > transit)
> > > 
> > > Thanks in Advance
> > > 
> > > Khalid
> > > 
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