Hello Manish,

To add to Tyson, AFAIK If you want to configure *GRE over IPSec*, then

1) Either configure tunnel protection on the tunnel interface
2) Or configure a crypto map on the Physical interface , with the
interesting traffic specified as the GRE encapsulated traffic

If you want to configure* IPSec over GRE* , then

1) Configure the Crypto map on the tunnel-interface. This will encrypt the
un-tunnelled clear-text packet. And when the encrypted traffic is to be sent
out of a physical interface, it just encapsulates this encrypted packet in a
GRE header and shoots it over to the other peer.

Remember, traffic in the tunnels can be treated as the original traffic
prior to tunnelling . So whatever configuration that you do inside the GRE
tunnel (ex: QOS , encryption)  will apply to the traffic prior to tunneling.
It's only when the traffic is heading out through an interface, will it be
tunnelled (based on the tunnel mode configured in the tunnel interface ) and
conditionally encrypted( if you have applied a crypto map or configure
tunnel protection configured on the interface).

You could check this out ( VTI ) ->
http://www.cisco.com/en/US/docs/ios/sec_secure_connectivity/configuration/guide/sec_ipsec_virt_tunnl_ps6441_TSD_Products_Configuration_Guide_Chapter.html#wp1072476

Cheers,
TacACK
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