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Using MD5 passwords with LDAP


i am trying to use openldap as  an authentication server. 
since rhl 7.0 uses MD5 passwds, and since i have over 
5000 users, i need to be able to authenticate with the 
same passwd string as from /etc/shadow.

The problem is that the user gets Invalid Credentials message
whenver i try connecting as the user. if i change to passwd to 
using {crypt} create new passwd, then user authenticates.
but not using {MD5} and the md5 crypted passwd. 

I have also noticed that the default install of openldap 1.2.11-15
on the rh7.0 box works fine with the same MD5 passwds. 

so what exactly do i need to do to get this working?? is there a 
compile time switch i have to set, libs to upgrade?
(cyrus-sasl-1.5.24-6 - default that came with rh7.0)

Thanks a lot,