Hi Shantan,
I believe the problem may be that libvirt 1.x requires TLS by default on connections. I saw that same problem the 1st time I replaces a running libvirt 0.9.x with 1.0.0. I believe there may be a way to turn off this requirement
in libvirtd.conf, e.g.
#
# Network connectivity controls
#
# Flag listening for secure TLS connections on the public TCP/IP port.
# NB, must pass the --listen flag to the libvirtd process for this to
# have any effect.
#
# It is necessary to setup a CA and issue server certificates before
# using this capability.
#
# This is enabled by default, uncomment this to disable it
#listen_tls = 0
# Listen for unencrypted TCP connections on the public TCP/IP port.
# NB, must pass the --listen flag to the libvirtd process for this to
# have any effect.
#
# Using the TCP socket requires SASL authentication by default. Only
# SASL mechanisms which support data encryption are allowed. This is
# DIGEST_MD5 and GSSAPI (Kerberos5)
#
# This is disabled by default, uncomment this to enable it.
#listen_tcp = 1 <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<
On the two instances of libvirt 1.x I have deployed, I just configure and use TLS. Instructions on doing this may be found here:
http://wiki.libvirt.org/page/TLSSetup
HTH,
Will