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I am trying to set up a virtual machine in CentOS, with virt-manager. When I was creating a new machine, i was promoted the following message.

Unable to complete install: 'internal error Process exited while reading console log
output: char device redirected to /dev/pts/1
inet_listen_opts: bind(ipv4,,5900): Cannot assign requested address
inet_listen_opts: FAILED
Failed to start VNC server on `'

virtual machine should not be using VNC? Is there a way to disable this setting?

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Looks like you don't have a loopback interface. Have you disabled it? Try something like this:

ifconfig lo netmask up
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