Index: res/res_jabber.c
===================================================================
--- res/res_jabber.c	(revision 337971)
+++ res/res_jabber.c	(working copy)
@@ -1767,6 +1767,8 @@
 		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 +1778,16 @@
 					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;