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I know how to have squid work as a transparent proxy. You put it into transparent mode then use your router or IPTABLES to forward port 80 to the squid port. I would like to do the same for SSL. Every guide I see mentions setting up keys on the squid server. I do not want squid to actually decrypt the SSL traffic then establish a connection with the server, rather I would like squid to simply forward the SSL traffic as is. The only thing I would like to do is be able to check the SSL request for any offending IPs and drop the packets if the destination is one of them.

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You don't need Squid for that. Just add "DROP" rules in your edge firewall for new outbound connections to TCP port 443 to the "offending IPs".

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