diff --git a/.gitignore b/.gitignore
index 99b391f..a4df282 100644
--- a/.gitignore
+++ b/.gitignore
@@ -1 +1,2 @@
 libssh2-1.2.4.tar.gz
+/libssh2-1.2.7.tar.gz
diff --git a/libssh2-1.2.7.tar.gz.asc b/libssh2-1.2.7.tar.gz.asc
new file mode 100644
index 0000000..1f761c0
--- /dev/null
+++ b/libssh2-1.2.7.tar.gz.asc
@@ -0,0 +1,7 @@
+-----BEGIN PGP SIGNATURE-----
+Version: GnuPG v1.4.10 (GNU/Linux)
+
+iEYEABECAAYFAkxq+yUACgkQeOEcayedXJG20ACeMdXVfOb0uopARLRRxVdZ3y4/
+a5EAn2lxpeDn1L6JMtdYtJQT19hjfL1T
+=eefQ
+-----END PGP SIGNATURE-----
diff --git a/libssh2.spec b/libssh2.spec
index 15347de..dd4f16c 100644
--- a/libssh2.spec
+++ b/libssh2.spec
@@ -1,5 +1,5 @@
 Name:           libssh2
-Version:        1.2.4
+Version:        1.2.7
 Release:        1%{?dist}
 Summary:        A library implementing the SSH2 protocol
 
@@ -51,6 +51,11 @@ for i in ChangeLog NEWS ; do
     mv new $i
 done
 
+# make it possible to launch OpenSSH server for testing purposes
+chcon -t initrc_exec_t tests/ssh2.sh || :
+chcon -Rt etc_t tests/etc || :
+chcon -t sshd_key_t tests/etc/{host,user} || :
+
 %build
 %configure --disable-static --enable-shared
 
@@ -68,6 +73,9 @@ find %{buildroot} -name '*.la' -exec rm -f {} +
 find example/ -type d -name .deps -exec rm -rf {} +
 find example/ -type f '(' -name '*.am' -o -name '*.in' ')' -exec rm -v {} +
 
+# avoid multilib conflict on libssh2-docs
+mv -v example/Makefile example/Makefile.%{_arch}
+
 %check
 # sshd/loopback test fails under local build, with selinux enforcing 
 %{?_without_sshd_tests:echo "Skipping sshd tests" ; echo "exit 0" > tests/ssh2.sh }
@@ -100,6 +108,11 @@ rm -rf %{buildroot}
 %{_libdir}/pkgconfig/*
 
 %changelog
+* Tue Oct 12 2010 Kamil Dudka <kdudka@redhat.com> 1.2.7-1
+- update to 1.2.7 (#632916)
+- avoid multilib conflict on libssh2-docs
+- avoid build failure in mock with SELinux in the enforcing mode (#558964)
+
 * Fri Mar 12 2010 Chris Weyl <cweyl@alumni.drew.edu> 1.2.4-1
 - update to 1.2.4
 - drop old patch0
diff --git a/sources b/sources
index 9d21b2e..5fa0b4e 100644
--- a/sources
+++ b/sources
@@ -1 +1 @@
-4d65a66d5f232e5bb1d05b311e43d46d  libssh2-1.2.4.tar.gz
+a5d78344886f1282e4008c09bf568076  libssh2-1.2.7.tar.gz
diff --git a/transport_c_7a9d369.patch b/transport_c_7a9d369.patch
deleted file mode 100644
index d642991..0000000
--- a/transport_c_7a9d369.patch
+++ /dev/null
@@ -1,13 +0,0 @@
-diff --git a/src/transport.c b/src/transport.c
-index 19efdf2..d9a38ca 100644
---- a/src/transport.c
-+++ b/src/transport.c
-@@ -626,7 +626,7 @@ send_existing(LIBSSH2_SESSION * session, unsigned char *data,
- 
-     p->osent += rc;         /* we sent away this much data */
- 
--    return PACKET_NONE;
-+    return p->osent < data_len ? PACKET_EAGAIN : PACKET_NONE;
- }
- 
- /*