diff -urp v2.6.30/linux/Documentation/networking/ip-sysctl.txt linux/Documentation/networking/ip-sysctl.txt
--- v2.6.30/linux/Documentation/networking/ip-sysctl.txt	2009-06-13 10:53:29.000000000 +0300
+++ linux/Documentation/networking/ip-sysctl.txt	2009-06-13 15:54:15.000000000 +0300
@@ -637,6 +637,13 @@ accept_redirects - BOOLEAN
 forwarding - BOOLEAN
 	Enable IP forwarding on this interface.
 
+loop - BOOLEAN
+	By default (loop=0) the traffic between local IP addresses
+	is routed via interface "lo". Setting this flag for two
+	interfaces allows traffic between their IP addresses to
+	be looped externally. This is useful for setups where the
+	interfaces are attached to same broadcast medium.
+
 mc_forwarding - BOOLEAN
 	Do multicast routing. The kernel needs to be compiled with CONFIG_MROUTE
 	and a multicast routing daemon is required.
diff -urp v2.6.30/linux/include/linux/inetdevice.h linux/include/linux/inetdevice.h
--- v2.6.30/linux/include/linux/inetdevice.h	2009-06-13 10:53:56.000000000 +0300
+++ linux/include/linux/inetdevice.h	2009-06-13 15:54:15.000000000 +0300
@@ -106,6 +106,7 @@ static inline void ipv4_devconf_setall(s
 	  IN_DEV_ORCONF((in_dev), ACCEPT_REDIRECTS)))
 
 #define IN_DEV_ARPFILTER(in_dev)	IN_DEV_ORCONF((in_dev), ARPFILTER)
+#define IN_DEV_LOOP(in_dev)		IN_DEV_CONF_GET(in_dev, LOOP)
 #define IN_DEV_ARP_ANNOUNCE(in_dev)	IN_DEV_MAXCONF((in_dev), ARP_ANNOUNCE)
 #define IN_DEV_ARP_IGNORE(in_dev)	IN_DEV_MAXCONF((in_dev), ARP_IGNORE)
 #define IN_DEV_ARP_NOTIFY(in_dev)	IN_DEV_MAXCONF((in_dev), ARP_NOTIFY)
diff -urp v2.6.30/linux/include/linux/sysctl.h linux/include/linux/sysctl.h
--- v2.6.30/linux/include/linux/sysctl.h	2009-06-13 10:53:56.000000000 +0300
+++ linux/include/linux/sysctl.h	2009-06-13 15:54:40.000000000 +0300
@@ -491,6 +491,7 @@ enum
 	NET_IPV4_CONF_PROMOTE_SECONDARIES=20,
 	NET_IPV4_CONF_ARP_ACCEPT=21,
 	NET_IPV4_CONF_ARP_NOTIFY=22,
+	NET_IPV4_CONF_LOOP=23,
 	__NET_IPV4_CONF_MAX
 };
 
diff -urp v2.6.30/linux/kernel/sysctl_check.c linux/kernel/sysctl_check.c
--- v2.6.30/linux/kernel/sysctl_check.c	2009-06-13 10:53:57.000000000 +0300
+++ linux/kernel/sysctl_check.c	2009-06-13 15:55:00.000000000 +0300
@@ -220,6 +220,7 @@ static const struct trans_ctl_table tran
 	{ NET_IPV4_CONF_PROMOTE_SECONDARIES,	"promote_secondaries" },
 	{ NET_IPV4_CONF_ARP_ACCEPT,		"arp_accept" },
 	{ NET_IPV4_CONF_ARP_NOTIFY,		"arp_notify" },
+	{ NET_IPV4_CONF_LOOP,			"loop" },
 	{}
 };
 
diff -urp v2.6.30/linux/net/ipv4/devinet.c linux/net/ipv4/devinet.c
--- v2.6.30/linux/net/ipv4/devinet.c	2009-06-13 10:53:58.000000000 +0300
+++ linux/net/ipv4/devinet.c	2009-06-13 15:55:22.000000000 +0300
@@ -1449,6 +1449,7 @@ static struct devinet_sysctl_table {
 		DEVINET_SYSCTL_RW_ENTRY(ARP_IGNORE, "arp_ignore"),
 		DEVINET_SYSCTL_RW_ENTRY(ARP_ACCEPT, "arp_accept"),
 		DEVINET_SYSCTL_RW_ENTRY(ARP_NOTIFY, "arp_notify"),
+		DEVINET_SYSCTL_RW_ENTRY(LOOP, "loop"),
 
 		DEVINET_SYSCTL_FLUSHING_ENTRY(NOXFRM, "disable_xfrm"),
 		DEVINET_SYSCTL_FLUSHING_ENTRY(NOPOLICY, "disable_policy"),
diff -urp v2.6.30/linux/net/ipv4/fib_frontend.c linux/net/ipv4/fib_frontend.c
--- v2.6.30/linux/net/ipv4/fib_frontend.c	2009-06-13 10:53:58.000000000 +0300
+++ linux/net/ipv4/fib_frontend.c	2009-06-13 15:54:15.000000000 +0300
@@ -239,16 +239,17 @@ int fib_validate_source(__be32 src, __be
 					.tos = tos } },
 			    .iif = oif };
 	struct fib_result res;
-	int no_addr, rpf;
+	int no_addr, rpf, loop;
 	int ret;
 	struct net *net;
 
-	no_addr = rpf = 0;
+	no_addr = rpf = loop = 0;
 	rcu_read_lock();
 	in_dev = __in_dev_get_rcu(dev);
 	if (in_dev) {
 		no_addr = in_dev->ifa_list == NULL;
 		rpf = IN_DEV_RPFILTER(in_dev);
+		loop = IN_DEV_LOOP(in_dev);
 	}
 	rcu_read_unlock();
 
@@ -258,6 +259,11 @@ int fib_validate_source(__be32 src, __be
 	net = dev_net(dev);
 	if (fib_lookup(net, &fl, &res))
 		goto last_resort;
+	if (loop && res.type == RTN_LOCAL) {
+		*spec_dst = FIB_RES_PREFSRC(res);
+		fib_res_put(&res);
+		return 0;
+	}
 	if (res.type != RTN_UNICAST)
 		goto e_inval_res;
 	*spec_dst = FIB_RES_PREFSRC(res);
diff -urp v2.6.30/linux/net/ipv4/route.c linux/net/ipv4/route.c
--- v2.6.30/linux/net/ipv4/route.c	2009-06-13 10:53:58.000000000 +0300
+++ linux/net/ipv4/route.c	2009-06-13 15:54:15.000000000 +0300
@@ -2521,6 +2521,11 @@ static int ip_route_output_slow(struct n
 			dev_put(dev_out);
 			goto out;	/* Wrong error code */
 		}
+		err = -ENETDOWN;
+		if (!(dev_out->flags&IFF_UP)) {
+			dev_put(dev_out);
+			goto out;
+		}
 
 		if (ipv4_is_local_multicast(oldflp->fl4_dst) ||
 		    oldflp->fl4_dst == htonl(0xFFFFFFFF)) {
@@ -2588,10 +2593,41 @@ static int ip_route_output_slow(struct n
 	free_res = 1;
 
 	if (res.type == RTN_LOCAL) {
-		if (!fl.fl4_src)
-			fl.fl4_src = fl.fl4_dst;
+		struct in_device *in_dev;
+		__be32 src;
+
 		if (dev_out)
 			dev_put(dev_out);
+		dev_out = FIB_RES_DEV(res);
+		in_dev = in_dev_get(dev_out);
+		src = fl.fl4_src? : FIB_RES_PREFSRC(res);
+		if (in_dev && IN_DEV_LOOP(in_dev) && src) {
+			struct net_device *dev_src;
+
+			in_dev_put(in_dev);
+			in_dev = NULL;
+			dev_src = ip_dev_find(net, src);
+			if (dev_src && dev_src != dev_out &&
+			    (in_dev = in_dev_get(dev_src)) &&
+			    IN_DEV_LOOP(in_dev)) {
+				in_dev_put(in_dev);
+				dev_out = dev_src;
+				fl.fl4_src = src;
+				fl.oif = dev_out->ifindex;
+				res.type = RTN_UNICAST;
+				if (res.fi) {
+					fib_info_put(res.fi);
+					res.fi = NULL;
+				}
+				goto make_route;
+			}
+			if (dev_src)
+				dev_put(dev_src);
+		}
+		if (in_dev)
+			in_dev_put(in_dev);
+		if (!fl.fl4_src)
+			fl.fl4_src = fl.fl4_dst;
 		dev_out = net->loopback_dev;
 		dev_hold(dev_out);
 		fl.oif = dev_out->ifindex;