Why VM creation in KVM is failing with error: libvirtError: Unable to read from monitor: Connection reset by peer on Red Hat Enterprise Liunx 6.5?

Issue

    While creating/ starting VM, getting below error:

Unable to complete install: 'Unable to read from monitor: Connection reset by peer'

Traceback (most recent call last):
  File "/usr/share/virt-manager/virtManager/asyncjob.py", line 44, in cb_wrapper
    callback(asyncjob, *args, **kwargs)
  File "/usr/share/virt-manager/virtManager/create.py", line 1928, in do_install
    guest.start_install(False, meter=meter)
  File "/usr/lib/python2.6/site-packages/virtinst/Guest.py", line 1229, in start_install
    noboot)
  File "/usr/lib/python2.6/site-packages/virtinst/Guest.py", line 1297, in _create_guest
    dom = self.conn.createLinux(start_xml or final_xml, 0)
  File "/usr/lib64/python2.6/site-packages/libvirt.py", line 2686, in createLinux
    if ret is None:raise libvirtError('virDomainCreateLinux() failed', conn=self)
libvirtError: Unable to read from monitor: Connection reset by peer

Resolution

    Add Display/ video drivers spice, virtio, qxl in the VM configuration.
    Set loopback address eth-lo to up.

Root Cause

    Display hardware virtio, spice, qxl were not enabled or added in VM configuration.
    Loopback interface eth-lo was down to make localhost connection.