Change settings in squid.conf as suggested by Animesh, i.e.,

httpd_accel_host virtual httpd_accle_port 80 httpd_accel_with_proxy on httpd_accel_uses_host_header on

Restart Squid

NOTE: Remove any proxy-auth ACLs from squid.conf

Then give the following command line:

iptables -t nat -A PREROUTING -s <xxx.xxx.xxx.xxx/xx> -p tcp --dport 80 -j REDIRECT --to-port 3128

Where the xxx.xxx.xxx.xxx/xx is the LAN IP range in CIDR notation.

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