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SELinux problems on Fedora 17.
Anyone that has tried Fedora 17 over the last couple of days, might have noticed SELinux going nuts and blocking logins. 

systemd had a bug which was causing transitions to break.

The way the system is supposed to work is during boot systemd reads in the policy file on disk and then loads policy into the kernel.
This causes all processes at that are running to be labeled kernel_t. 

systemd then reads the label on its image file /sbin/systemd (init_exec_t) and the label that it is currently running as (kernel_t), then it asks the kernel what label would the /sbin/systemd process get if kernel_t executed it.  The answer would be init_t, and then systemd is supposed to set the current label to init_t.   From that point on all processes started by systemd would transition to their proper domains.

Well just before systemd/Fedora 17 Alpha was about to be released.  Systemd changed the location of its executable from /bin/systemd to /usr/lib/systemd/systemd.  But they never changed the checking code.  We fixed policy to look at the new location and labeled /usr/lib/systemd/systemd correctly, but when systemd checked for the label of /bin/systemd, there was no file and systemd just continued running as kernel_t.  Since there are few rules for transitions of kernel_t to any other label, most of the system was labeled as kernel_t.  Finally when a user logged in via gdm or login or sshd, they were running as kernel_t and the code transitioned them to abrt_t, one of the few domains kernel_t will transition to.

systemd-42-1.fc17 fixes this problem, so if you update to this systemd or later, you should be able to run your system in enforcing mode. 

Needless to say, we have been flooded with bug reports...

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