Bridging Adapter in Ubuntu 12.04 LTS for KVM

Question

Fresh install of Ubuntu 12.04 LTS with libvert/KVM installed. I have 2 virtual machines that I need need to be on the same LAN as the host. The host has two physical interfaces eth0 and eth1. eth1 is not in use. I would like eth0 to have a static assigned IP and act as a bridge for my VM's.

Prior to setting up the bridge my /etc/network/interfaces looks like:

# The loopback network interface
auto lo
iface lo inet loopback

# The primary network interface
auto eth0
iface eth0 inet static
    address 10.0.5.5
    netmask 255.255.255.0
    gateway 10.0.5.254
    dns-nameservers 10.0.5.1

Everything works as expected under this configuration. However, When I apply the below captioned configuration:

# The loopback network interface
auto lo
iface lo inet loopback

# The primary network interface
auto br0
iface br0 inet static
    address 10.0.5.5
    netmask 255.255.255.0
    gateway 10.0.5.254
    dns-nameservers 10.0.5.1
    bridge_ports eth0
    bridge_stp off
    bridge_maxwait 0
    bridge_fd 0

Under this configuration I can ping internal hosts by IP and name. Name resolution works as expected. Attempting to ping an external hosts yields "No route to host."

Here is ifconfig -a after the bridge configuration is applied.

br0       Link encap:Ethernet  HWaddr 00:25:90:da:29:8f  
          inet addr:10.0.5.5  Bcast:10.0.5.255  Mask:255.255.255.0
          inet6 addr: fe80::225:90ff:feda:298f/64 Scope:Link
          UP BROADCAST RUNNING MULTICAST  MTU:1500  Metric:1
          RX packets:11569 errors:0 dropped:0 overruns:0 frame:0
          TX packets:586 errors:0 dropped:0 overruns:0 carrier:0
          collisions:0 txqueuelen:0 
          RX bytes:1433248 (1.4 MB)  TX bytes:63079 (63.0 KB)

eth0      Link encap:Ethernet  HWaddr 00:25:90:da:29:8f  
          inet addr:10.0.5.107  Bcast:10.0.5.255  Mask:255.255.255.0
          inet6 addr: fe80::225:90ff:feda:298f/64 Scope:Link
          UP BROADCAST RUNNING MULTICAST  MTU:1500  Metric:1
          RX packets:13632 errors:0 dropped:122 overruns:0 frame:0
          TX packets:1240 errors:0 dropped:0 overruns:0 carrier:0
          collisions:0 txqueuelen:1000 
          RX bytes:2008747 (2.0 MB)  TX bytes:119540 (119.5 KB)
          Interrupt:20 Memory:dfa00000-dfa20000 

eth1      Link encap:Ethernet  HWaddr 00:25:90:da:29:8e  
          UP BROADCAST MULTICAST  MTU:1500  Metric:1
          RX packets:0 errors:0 dropped:0 overruns:0 frame:0
          TX packets:0 errors:0 dropped:0 overruns:0 carrier:0
          collisions:0 txqueuelen:1000 
          RX bytes:0 (0.0 B)  TX bytes:0 (0.0 B)
          Interrupt:16 Memory:df900000-df920000 

lo        Link encap:Local Loopback  
          inet addr:127.0.0.1  Mask:255.0.0.0
          inet6 addr: ::1/128 Scope:Host
          UP LOOPBACK RUNNING  MTU:65536  Metric:1
          RX packets:745 errors:0 dropped:0 overruns:0 frame:0
          TX packets:745 errors:0 dropped:0 overruns:0 carrier:0
          collisions:0 txqueuelen:0 
          RX bytes:66095 (66.0 KB)  TX bytes:66095 (66.0 KB)

virbr0    Link encap:Ethernet  HWaddr c2:dd:f8:44:eb:2d  
          inet addr:192.168.122.1  Bcast:192.168.122.255  Mask:255.255.255.0
          UP BROADCAST MULTICAST  MTU:1500  Metric:1
          RX packets:0 errors:0 dropped:0 overruns:0 frame:0
          TX packets:0 errors:0 dropped:0 overruns:0 carrier:0
          collisions:0 txqueuelen:0 
          RX bytes:0 (0.0 B)  TX bytes:0 (0.0 B)

Ultimately, I want eth0 to have static 10.0.5.5 and put both of my VM's on this interface with statically assigned 10.0.5.6-7. What is wrong with my configuration?