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How do I install Squid Proxy server on CentOS 5 Liinux server?

Sure Squid server is a popular open source GPLd proxy and web cache. It has a variety of uses, from speeding up a web server by caching repeated requests, to caching web, name server query , and other network lookups for a group of people sharing network resources. It is primarily designed to run on Linux / Unix-like systems. Squid is a high-performance proxy caching server for Web clients, supporting FTP, gopher, and HTTP data objects. Unlike traditional caching software, Squid handles all requests in a single, non-blocking, I/O-driven process. Squid keeps meta data and especially hot objects cached in RAM, caches DNS lookups, supports non-blocking DNS lookups, and implements negative caching of failed requests. Squid consists of a main server program squid, a Domain Name System lookup program (dnsserver), a program for retrieving FTP data (ftpget), and some management and client tools.

Install Squid on CentOS / RHEL 5

Use yum command as follows:
# yum install squid
Output:

Loading "installonlyn" plugin
Setting up Install Process
Setting up repositories
Reading repository metadata in from local files
Parsing package install arguments
Resolving Dependencies
--> Populating transaction set with selected packages. Please wait.
---> Package squid.i386 7:2.6.STABLE6-4.el5 set to be updated
--> Running transaction check
Dependencies Resolved
=============================================================================
 Package Arch Version Repository Size
=============================================================================
Installing:
 squid i386 7:2.6.STABLE6-4.el5 updates 1.2 M
Transaction Summary
=============================================================================
Install 1 Package(s)
Update 0 Package(s)
Remove 0 Package(s)
Total download size: 1.2 M
Is this ok [y/N]: y
Downloading Packages:
Running Transaction Test
Finished Transaction Test
Transaction Test Succeeded
Running Transaction
 Installing: squid ######################### [1/1]
Installed: squid.i386 7:2.6.STABLE6-4.el5
Complete!

Squid Basic Configuration

Squid configuration file located at /etc/squid/squid.conf. Open file using a text editor:
# vi /etc/squid/squid.conf
At least you need to define ACL (access control list) to work with squid. The defaults port is TCP 3128. Following example ACL allowing access from your local networks 192.168.1.0/24 and 192.168.2.0/24. Make sure you adapt to list your internal IP networks from where browsing should be allowed:
acl our_networks src 192.168.1.0/24 192.168.2.0/24
http_access allow our_networks

Save and close the file. Start squid proxy server:
# chkconfig squid on
# /etc/init.d/squid start
Output:

init_cache_dir /var/spool/squid... Starting squid: . [ OK ]

Verify port 3128 is open:
# netstat -tulpn | grep 3128
Output:

tcp 0 0 0.0.0.0:3128 0.0.0.0:* LISTEN 20653/(squid)

Open TCP port 3128

Finally make sure iptables is allowing to access squid proxy server. Just open /etc/sysconfig/iptables file:
# vi /etc/sysconfig/iptables
Append configuration:
-A RH-Firewall-1-INPUT -m state --state NEW,ESTABLISHED,RELATED -m tcp -p tcp --dport 3128 -j ACCEPT
Restart iptables based firewall:
# /etc/init.d/iptables restart
Output:

Flushing firewall rules: [ OK ]
Setting chains to policy ACCEPT: filter [ OK ]
Unloading iptables modules: [ OK ]
Applying iptables firewall rules: [ OK ]
Loading additional iptables modules: ip_conntrack_netbios_n[ OK ]

Client configuration

Open a webbrowser > Tools > Internet option > Network settings > and setup Squid server IP address and port # 3128.