If SEOS authentication method fails than it is not supported by your Linux flavor and should be disabled in /etc/ssh/sshd_config.

On the client machine perform the following step:

[root@host]# ssh -N -L :: user@remote-machine-ip

From a new console/terminal execute the telnet command as follows:

[root@host]# telnet localhost

This kb is relevant to the following;

• Encrypt the traffic by SSH tunneling the connection to remote host.
• Encrypt unencrypted network traffic