Description of problem:

The new ruleset is written to /etc/sysconfig/iptables with several rules
prepended with the string 'iptables', which breaks the configuration (see
second example line):

   -A FORWARD -j RH-Firewall-1-INPUT
   iptables -A RH-Firewall-1-INPUT -i lo -j ACCEPT

The error on 'service iptables restart':

[root@as /]# service iptables restart
Flushing firewall rules:                                   [  OK  ]
Setting chains to policy ACCEPT: filter                    [  OK  ]
Unloading iptables modules:                                [  OK  ]
Applying iptables firewall rules: Bad argument `iptables'
Error occured at line: 10
Try `iptables-restore -h' or 'iptables-restore --help' for more information.
                                                           [FAILED]
[root@as /]#

Version-Release number of selected component (if applicable): 
1.2.0-1

How reproducible:  
Every time.  Run redhat-config-securitylevel and click 'Ok' to get the default
configuration.