Here is the policy configuration I use in day-to-day work:

On server (10.0.0.1) side:
setkey flush;
setkey spdflush;
setkey spdadd 10.0.0.1 10.0.0.0/8[1701] udp -P out \
ipsec esp/transport//require;
setkey spdadd 10.0.0.0/8 10.0.0.1[1701] udp -P in \
ipsec esp/transport//require;

On client (10.0.0.2)side:
setkey flush;
setkey spdflush;
setkey spdadd 10.0.0.2 10.0.0.1[1701] udp -P out \
ipsec esp/transport//require;
setkey spdadd 10.0.0.1 10.0.0.2[1701] udp -P in \
ipsec esp/transport//require;

Tip: For debugging it can be very useful to use AH instead 
of ESP, because you can then use tcpdump etc. to look 
*into* the tunnel.

Bye
Markus

>----- ------- Original Message ------- -----
>From: Jacco de Leeuw <[EMAIL PROTECTED]>
>To:  [EMAIL PROTECTED]
>Sent: Fri, 13 Feb 2004 16:51:06
>
>Key Dof wrote:
>
>> the windows client sends ESP packets then the
>server replies directly with
> > echo reply (no esp) so i think it replies
>outside the l2tp tunnel.
>
>Have you read Chris Andrew's page about using l2tpd
>with KAME/racoon?
>http://www.funknet.org/doc/tunnel/l2tp.html
>

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