This is nothing but the SELinux causes the trouble
solutions
do either one of this steps
1. goto firewall configuration tools and disable selinux and restart machine
2. edit /etc/selinux/config
you will find a entry selinux="enforce"
change to selinux="disabled"
and restart machine
3. in the command prompt run the command
setenforce 0
then run squid -z
rgrds
Rajesh
if it helped you plese mail me @
raj_cet04@yahoo.com