Index: res/res_jabber.c
===================================================================
--- res/res_jabber.c	(revision 337971)
+++ res/res_jabber.c	(working copy)
@@ -1431,8 +1431,10 @@
 		case IKS_NOMEM:
 			ast_log(LOG_WARNING, "Parsing failure: Out of memory.\n");
 			break;
-		case IKS_BADXML:
-			ast_log(LOG_WARNING, "Parsing failure: Invalid XML.\n");
+		case IKS_BADXML: /* Empty <handshake /> element is valid when connecting as component to XMPP, so absorb this*/
+			if (!(client->component && client->state == AJI_CONNECTING)) {
+                        	ast_log(LOG_WARNING, "Parsing failure: Invalid XML.\n");
+			}
 			break;
 		case IKS_HOOK:
 			ast_log(LOG_WARNING, "Parsing failure: Hook returned an error.\n");
@@ -1767,6 +1769,8 @@
 		case IKS_NODE_START:
 			if (client->state == AJI_DISCONNECTED) {
 				char secret[160], shasum[320], *handshake;
+			
+				client->state = AJI_CONNECTING;
 
 				sprintf(secret, "%s%s", pak->id, client->password);
 				ast_sha1_hash(shasum, secret);
@@ -1776,12 +1780,16 @@
 					ast_free(handshake);
 					handshake = NULL;
 				}
-				client->state = AJI_CONNECTING;
-				if (aji_recv(client, 1) == 2) /*XXX proper result for iksemel library on iks_recv of <handshake/> XXX*/
+
+				/* Upon successful authentication, the server will send empty handshake element, "<handshake/>", 
+				   which is proper, but iksemel returns IKS_BADXML; so check for this return code and 
+				   indicate we are connected; this probably should be improved upon */
+				if (aji_recv(client, 1) == IKS_BADXML) {
 					client->state = AJI_CONNECTED;
-				else
+				} else {
 					ast_log(LOG_WARNING, "Jabber didn't seem to handshake, failed to authenticate.\n");
-				break;
+					client->state = AJI_DISCONNECTED;
+				}
 			}
 			break;
 
@@ -2818,9 +2826,11 @@
 		} else if (res == IKS_NET_TLSFAIL) {
 			ast_log(LOG_ERROR, "JABBER:  Failure in TLS.\n");
 		} else if (client->timeout == 0 && client->state == AJI_CONNECTED) {
+			client->state = AJI_CONNECTING;
 			res = client->keepalive ? aji_send_raw(client, " ") : IKS_OK;
 			if (res == IKS_OK) {
 				client->timeout = 50;
+				client->state = AJI_CONNECTED;
 			} else {
 				ast_log(LOG_WARNING, "JABBER:  Network Timeout\n");
 			}