Internet Key Exchange (IKE or IKEv2) is the protocol used to set up a security association (SA) in the IPsec protocol suite. IKE builds upon the Oakley protocol and ISAKMP. IKE uses X.509 certificates for authentication which are either pre-shared or distributed using DNS (preferably with DNSSEC) and a Diffie–Hellman key exchange to set up a shared session secret from which cryptographic keys are derived.
Internet Key Exchange (IKE) Internet key exchange allows communicating partners to prove their identity to each other and establish a secure communication channel, and is applied as an authentication component of IPSec.
IKE uses two phases:
Phase 1: In this phase, the partners authenticate with each other, using one of the following: Shared Secret: A key that is exchanged by humans via telephone, fax, encrypted e-mail, etc. Public Key Encryption: Digital certificates are exchanged. Revised mode of Public Key Encryption: To reduce the overhead of public key encryption, a nonce (a Cryptographic function that refers to a number or bit string used only once, in security engineering) is encrypted with the communicating partner’s public key, and the peer’s identity is encrypted with symmetric encryption using the nonce as the key. Next, IKE establishes a temporary security association and secure tunnel to protect the rest of the key exchange. Phase 2: The peers’ security associations are established, using the secure tunnel and temporary SA created at the end of phase 1.
The following reference(s) were used for this question:
Hernandez CISSP, Steven (2012-12-21). Official (ISC)2 Guide to the CISSP CBK, Third Edition ((ISC)2 Press) (Kindle Locations 7032-7048). Auerbach Publications. Kindle Edition. and RFC 2409 at http://tools.ietf.org/html/rfc2409 and http://en.wikipedia.org/wiki/Internet_Key_Exchange