iptables beginner question about ACCEPT

Question

I'm just reading up on iptables, finally. I'm a little confused because the input chain from the filter table (as installed, fedora 17), looks like this:

target     prot opt source               destination         
ACCEPT     all  --  anywhere             anywhere             state RELATED,ESTABLISHED
ACCEPT     icmp --  anywhere             anywhere            
ACCEPT     all  --  anywhere             anywhere            
ACCEPT     udp  --  anywhere             224.0.0.251          state NEW udp dpt:mdns
REJECT     all  --  anywhere             anywhere             reject-with icmp-host-prohibited

From what I've been reading, the third rule should just accept anything, but this is not the case (I have to disable iptables to allow access to sshd or an https server). All other chains for all other tables are policy ACCEPT, with no rules, except filter FORWARD which REJECTs everything.

So what does ACCEPT really do?

[EDIT] Added by serge's request (iptables -v -L):

Chain INPUT (policy ACCEPT 0 packets, 0 bytes)
 pkts bytes target     prot opt in     out     source               destination         
36625   38M ACCEPT     all  --  any    any     anywhere             anywhere             state RELATED,ESTABLISHED
    0     0 ACCEPT     icmp --  any    any     anywhere             anywhere            
    1    60 ACCEPT     all  --  lo     any     anywhere             anywhere            
    0     0 ACCEPT     udp  --  any    any     anywhere             224.0.0.251          state NEW udp dpt:mdns
  534 73926 REJECT     all  --  any    any     anywhere             anywhere             reject-with icmp-host-prohibited

Chain FORWARD (policy ACCEPT 0 packets, 0 bytes)
 pkts bytes target     prot opt in     out     source               destination         
    0     0 REJECT     all  --  any    any     anywhere             anywhere             reject-with icmp-host-prohibited

Chain OUTPUT (policy ACCEPT 31484 packets, 3973K bytes)
 pkts bytes target     prot opt in     out     source               destination

So this implies to me that third rule actually only applies to the loopback interface? [yep]

Answer 1

The ACCEPT target is a terminating target that allows packet to get through NetFilter. The REJECT is a terminating targetd that effectively disallows packet to get through and causes the ICMP response to be sent to the packet originator. The third rule in your sample most likely looks like this if you list the tables with 'iptables -v -L' command:

Chain INPUT (policy ACCEPT 0 packets, 0 bytes)
 pkts bytes target     prot opt in     out     source               destination         
  639  304K ACCEPT     all  --  any    any     anywhere             anywhere             state RELATED,ESTABLISHED
    0     0 ACCEPT     icmp --  any    any     anywhere             anywhere            
  101  7798 ACCEPT     all  --  lo     any     anywhere             anywhere            

In the column in there is an interface the rule is matching on. For the third rule it is the lo interface, so this rule allows any traffic on loopback interface and this is correct, as otherwise you will not be able to access any local to the host services over TCP or UDP at localhost address.