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Iptables and Proxy server


We currently go through a slow frame relay link to our headquarters for
Internet access. We are getting a 1.1Mbit SDSL line installed within the
next couple of weeks for Internet access. I would like to setup a Linux box
to act as a firewall/router and proxy server for our new Internet access.

My question is: Should I use Squid with Iptables? I would like to just
configure the web browsers to use the
Linux  router as a proxy to the Internet and leave everything else the
same, e.g.,  I need to leave the default gateway on our machines to point to
our frame relay router for intra-office communications. I need a pretty
basic setup: block all incoming traffic to the Linux box and allow all
outgoing traffic through it.

I also don't need very fancy (if any) caching on the proxy - I just want the
machine to pass through it to the Internet and using a proxy is the only way
I could think since I can't change the default gateway to point to the Linux
router. The machine I was planning on using is a 800MHz Celeron with 128MB
memory. I have a decent size hard drive, so I have plenty of diskspace for
caching, if that's what people recommend.

Is using Squid in conjunction with Iptables the best way to do this or am I
way off base? Any tips, pointers or advice on this would be greatly


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