Ok I am answering my own question just incase someone also faces the same issue.

Compile time option -with-filedescriptors is just a suggestion to squid. (as 
clarified by Amos)


Earlier I was assuming that, it is enough and there is no need to set ulimit.

But after few commands and Amos's reply, I realised we must set ulimit.
Even after the WARNING by squid, squid was not actually increasing the limit.


Before ulimit (1024/4096) and -with-filedescriptors=16384

cat /proc/SQUIDPID/limits
Max open files            1024                 4096                 files     



After ulimit (16384/16384) and -with-filedescriptors=16384

cat /proc/SQUIDPID/limits
Max open files            16384                16384                files     


In short, you still need to set ulimit.


Here is how to do it on Fedora

1) Create file /etc/systemd/system/squid.service
2) Add following 3 lines in it.

.include /lib/systemd/system/squid.service
[Service]
LimitNOFILE=16384

3) systemctl daemon-reload
4) systemctl restart squid.service

Hope it helps

Amm


----- Original Message -----
> From: Amm <ammdispose-sq...@yahoo.com>
> To: "squid-users@squid-cache.org" <squid-users@squid-cache.org>
> Cc: 
> Sent: Thursday, 14 February 2013 3:53 PM
> Subject: Re: [squid-users] query about  --with-filedescriptors and ulimit
> 

>>>   I compiled squid using --with-filedescriptors=16384.
>>> 
>>>   So do I still need to set ulimit before starting squid?

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