Hi Konstantin, thank you for your answer. In the meantime I managed to resolve 
this problem. In moment of despair I have installed additional engine on 
virtual machine, the same version as the first one. On this instance I was able 
to upload, download and test connection without any issue, so I started 
comparing those two instances. The problem on first instance was disabled 
ImageTransferProxy option. So when I ran ovirt-config -s 
"ImageTransferProxyEnabled=true" followed by ovirt-engine restart, everything 
start working on original instance as well. 

Thank you for your answer and your time, your advice's are very good to use for 
general troubleshooting procedures. 
Best regards, Igor
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