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I have seen many posts explaining bridging eth and wlan interfaces. I would like to know if it is possible to bridge ppp0 interface (a USB modem) and eth0. I have a working internet connection through ppp0 interface. I want a DHCP server set up listening at the eth0 interface and assigning addresses to share internet connection received from ppp0.

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Bridging to a WAN link is a bad idea. What you need is a proper proxyarp setup

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In practice you want it to do IP masquerating / NAT, rather than bridging. DHCP is fairly straightforward: install the dhcp server packagae (try "dhcps" or "dhcp3-server"), configure for the ethernet range.

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You really, REALLY don't want to bridge your LAN to your WAN - this means that the server will try to copy ALL your LAN traffic across the WAN.

I want ... to share internet connection

Then you want to ROUTE the traffic. Unless all the machines on the network are using IP addresses assigned by your service provider (and therefore have secure firewalls configured) then you also need to implement masquerading on the router. However a better solution is to run application proxies on the internet connected device (e.g. squid for HTTP, leafnode for nntp, any MTA for SMTP, fetchmail+local imap server for pop/imap).

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