I've got a virtual machine running on KVM on my localhost. I can ssh into it without problems using hostname (entered in /etc/hosts) or the IP address.
scp root@remote:/somefile root@localvm:/
ssh: Could not resolve hostname localvm: Name or service not known
Using the IP address it says:
ssh: connect to host 192.168.122.132 port 22: Network is unreachable
This is interesting, I have no clue right now.
Edit: The localvm is not known on the remote host, this must be the problem.