Install Squid3 and Apache tools.
apt-get install squid3 apache2-utils
We will use Apache htpasswd to generate a password. If you don't want to install additional packages, you can use perl to generate your password.
Backup current Squid3 settings.
cp /etc/squid3/squid.conf /etc/squid3/squid.conf.bak
Open and replace the content in /etc/squid3/squid.conf with following:
http_port 3128
auth_param basic program /usr/lib/squid3/basic_ncsa_auth /etc/squid3/.passwd
auth_param basic children 1
auth_param basic credentialsttl 1 minute
auth_param basic casesensitive off
acl auth proxy_auth REQUIRED
acl localhost src 127.0.0.0/8
http_access allow auth
http_access allow localhost
http_access deny all
cache deny all
forwarded_for delete
request_header_access Via deny all
Notes: The default port for Squid is 3128, change it to another port for better security purposes.
Create a new user to login to the Squid3 server.
htpasswd -c /etc/squid3/.passwd YOUR_USER_NAME
If you do not have Apache tool installed, use perl to create your authentication.
echo -e "YOUR_USERNAME:`perl -le 'print crypt("YOUR_PASSWORD","salt")'`" > /etc/squid3/.passwd
Restart your Squid3 service, and the job is done.
/etc/init.d/squid3 restart