Hi,
The package installed is qemu-kvm-1.5.3-60.el7_0.10.x86_64 on CentOS 7.
I have upgraded my libvirt and qemu also, still i am getting the same error ( Operation not supported: live disk snapshot not supported with this QEMU binary  )
 # virsh version
Compiled against library: libvirt 1.2.10
Using library: libvirt 1.2.10
Using API: QEMU 1.2.10
Running hypervisor: QEMU 2.0.0



On Mon, Nov 24, 2014 at 9:52 PM, Eric Blake <eblake@redhat.com> wrote:
On 11/23/2014 04:15 AM, Payes Anand wrote:
> # virsh snapshot-create-as small snap1 --disk-only --atomic
> error: Operation not supported: live disk snapshot not supported with this
> QEMU binary
> OS used: CentOS 7

Libvirt can't do live snapshots if the underlying qemu cannot.  Since
you are using CentOS, I'd look into finding the qemu-kvm-rhev package
(the default qemu-kvm package is intentionally shipped with fewer
supported features, and you have run into one of those features).

--
Eric Blake   eblake redhat com    +1-919-301-3266
Libvirt virtualization library http://libvirt.org