Ubuntu – Public key authentication Permission denied (publickey)

I am trying to setup public key authentication on a server running Ubuntu 14.04 by following this post. I have done the following so far :

1. Generated RSA keys on host using ssh-keygen -t rsa.

   The keys (id_rsa & id_rsa.pub ) are now stored in ~/.ssh directory.

2. Copied the keys to server using ssh-copy-id <username>@<host>

3. Edited /etc/ssh/sshd_config file to add line PasswordAuthentication no.

4. Restarted ssh with /etc/init.d/ssh restart.

Now when I try to ssh from host to server I get the following displayed (I have edited out some details like server address and host names):

$:ssh -v user@domain
OpenSSH_6.6.1, OpenSSL 1.0.1f 6 Jan 2014
debug1: Reading configuration data /home/host/.ssh/config
debug1: Reading configuration data /etc/ssh/ssh_config
debug1: /etc/ssh/ssh_config line 19: Applying options for *
debug1: Connecting to domain [192.168.xx.xx] port 22.
debug1: Connection established.
debug1: identity file /home/host/.ssh/id_rsa type 1
debug1: identity file /home/host/.ssh/id_rsa-cert type -1
debug1: identity file /home/host/.ssh/id_dsa type -1
debug1: identity file /home/host/.ssh/id_dsa-cert type -1
debug1: identity file /home/host/.ssh/id_ecdsa type -1
debug1: identity file /home/host/.ssh/id_ecdsa-cert type -1
debug1: identity file /home/host/.ssh/id_ed25519 type -1
debug1: identity file /home/host/.ssh/id_ed25519-cert type -1
debug1: Enabling compatibility mode for protocol 2.0
debug1: Local version string SSH-2.0-OpenSSH_6.6.1p1 Ubuntu-2ubuntu2.8
debug1: Remote protocol version 2.0, remote software version OpenSSH_6.6.1p1 Ubuntu-2ubuntu2.8
debug1: match: OpenSSH_6.6.1p1 Ubuntu-2ubuntu2.8 pat OpenSSH_6.6.1* compat 0x04000000
debug1: SSH2_MSG_KEXINIT sent
debug1: SSH2_MSG_KEXINIT received
debug1: kex: server->client aes128-ctr hmac-md5-etm@openssh.com none
debug1: kex: client->server aes128-ctr hmac-md5-etm@openssh.com none
debug1: sending SSH2_MSG_KEX_ECDH_INIT
debug1: expecting SSH2_MSG_KEX_ECDH_REPLY
debug1: Server host key: ECDSA 16:00:b8:c5:89:af:e9:50:22:85:76:6d:65:1c:aa:b4
debug1: Host 'domain' is known and matches the ECDSA host key.
debug1: Found key in /home/host/.ssh/known_hosts:2
debug1: ssh_ecdsa_verify: signature correct
debug1: SSH2_MSG_NEWKEYS sent
debug1: expecting SSH2_MSG_NEWKEYS
debug1: SSH2_MSG_NEWKEYS received
debug1: SSH2_MSG_SERVICE_REQUEST sent
debug1: SSH2_MSG_SERVICE_ACCEPT received
debug1: Authentications that can continue: publickey
debug1: Next authentication method: publickey
debug1: Offering RSA public key: /home/host/.ssh/id_rsa
debug1: Authentications that can continue: publickey
debug1: Trying private key: /home/host/.ssh/id_dsa
debug1: Trying private key: /home/host/.ssh/id_ecdsa
debug1: Trying private key: /home/host/.ssh/id_ed25519
debug1: No more authentication methods to try.
Permission denied (publickey).

I have followed this to fix the issue and did the following :

1. Ensured permissions are not too open by OpenSSH standards.

   chmod go-w ~/
   chmod 700 ~/.ssh
   chmod 600 ~/.ssh/authorized_keys
   

2. Created a authorized_keys file in host computer by ssh-copy-id host@127.0.0.1 and copied the authorized_keys file to the server, changed ownership and permissions as required then.

Still the issue persists. I was able to ssh into the server successfully using password before trying to use Publickey authentication. Has anyone else faced similar issues?

Edit :

There was a new line added to the output when I tried to ssh in later : Agent admitted failure to sign using the key.. Some googling led to this issue. The issue is called gnome-keyring interference. When I tried SSH_AUTH_SOCK=0 ssh user@domain I was able to login into the server successfully using publickey authentication. Thank you all for your contribution.