dnsmasq: lease-init script returned exit code 1

Running nova-network fails with the following error:

root@openstack1:nova-2011.3# ./bin/nova-network --flagfile=/etc/nova/nova.conf
Traceback (most recent call last):
  File "/usr/lib/pymodules/python2.7/eventlet/hubs/hub.py", line 336, in fire_timers
    timer()
  File "/usr/lib/pymodules/python2.7/eventlet/hubs/timer.py", line 56, in __call__
    cb(*args, **kw)
  File "/usr/lib/pymodules/python2.7/eventlet/greenthread.py", line 192, in main
    result = function(*args, **kwargs)
  File "/home/openstack/nova-2011.3/nova/service.py", line 77, in run_server
    server.start()
  File "/home/openstack/nova-2011.3/nova/service.py", line 137, in start
    self.manager.init_host()
  File "/home/openstack/nova-2011.3/nova/network/manager.py", line 928, in init_host
    super(FlatDHCPManager, self).init_host()
  File "/home/openstack/nova-2011.3/nova/network/manager.py", line 360, in init_host
    self._setup_network(ctxt, network)
  File "/home/openstack/nova-2011.3/nova/network/manager.py", line 942, in _setup_network
    self.driver.update_dhcp(context, dev, network_ref)
  File "/home/openstack/nova-2011.3/nova/utils.py", line 684, in inner
    retval = f(*args, **kwargs)
  File "/home/openstack/nova-2011.3/nova/network/linux_net.py", line 566, in update_dhcp
    _execute(*cmd, run_as_root=True)
  File "/home/openstack/nova-2011.3/nova/network/linux_net.py", line 643, in _execute
    return utils.execute(*cmd, **kwargs)
  File "/home/openstack/nova-2011.3/nova/utils.py", line 187, in execute
    cmd=' '.join(cmd))
ProcessExecutionError: Unexpected error while running command.
Command: sudo FLAGFILE=/etc/nova/nova.conf NETWORK_ID=10 dnsmasq --strict-order --bind-interfaces --interface=br100 --conf-file= --domain=novalocal --pid-file=/var/lib/nova/networks/nova-br100.pid --listen-address=10.10.0.1 --except-interface=lo --dhcp-range=10.10.0.2,static,120s --dhcp-lease-max=256 --dhcp-hostsfile=/var/lib/nova/networks/nova-br100.conf --dhcp-script=/usr/bin/nova-dhcpbridge --leasefile-ro
Exit code: 11
Stdout: ''
Stderr: '\ndnsmasq: lease-init script returned exit code 1\n'

Here is my nova.conf:
root@openstack1:nova-2011.3# cat /etc/nova/nova.conf
--dhcpbridge_flagfile=/etc/nova/nova.conf
--dhcpbridge=/usr/bin/nova-dhcpbridge
--logdir=/var/log/nova
--state_path=/var/lib/nova
--lock_path=/var/lock/nova
--verbose
--nodaemon

--s3_host=192.168.1.101
--rabbit_host=192.168.1.101
--cc_host=192.168.1.101
--ec2_url=http://192.168.1.101:8773/services/Cloud

--FAKE_subdomain=ec2
--routing_source_ip=192.168.1.101
--sql_connection=mysql://root:password@192.168.1.101/nova

--glance_host=192.168.1.101
--image_service=nova.image.glance.GlanceImageService
--glance_api_servers=192.168.1.101:9292

--bridge_interface=br100
--fixed_range=10.10.0.0/16
--network_size=8
--network_manager=nova.network.manager.FlatDHCPManager

--iscsi_ip_prefix=192.168.

Here is my ifconfig:
root@openstack1:nova-2011.3# ifconfig
br100 Link encap:Ethernet HWaddr 10:78:d2:e7:ce:cb
          inet addr:192.168.1.101 Bcast:192.168.1.255 Mask:255.255.255.0
          inet6 addr: fe80::1278:d2ff:fee7:cecb/64 Scope:Link
          UP BROADCAST RUNNING MULTICAST MTU:1500 Metric:1
          RX packets:1131063 errors:0 dropped:122104 overruns:0 frame:0
          TX packets:408742 errors:0 dropped:0 overruns:0 carrier:0
          collisions:0 txqueuelen:0
          RX bytes:547869799 (547.8 MB) TX bytes:150190551 (150.1 MB)

eth0 Link encap:Ethernet HWaddr 10:78:d2:e7:ce:cb
          inet6 addr: fe80::1278:d2ff:fee7:cecb/64 Scope:Link
          UP BROADCAST RUNNING MULTICAST MTU:1500 Metric:1
          RX packets:1622426 errors:0 dropped:20958 overruns:0 frame:0
          TX packets:404396 errors:0 dropped:7 overruns:0 carrier:0
          collisions:0 txqueuelen:1000
          RX bytes:671711570 (671.7 MB) TX bytes:149825817 (149.8 MB)
          Interrupt:40

lo Link encap:Local Loopback
          inet addr:127.0.0.1 Mask:255.0.0.0
          inet6 addr: ::1/128 Scope:Host
          UP LOOPBACK RUNNING MTU:16436 Metric:1
          RX packets:165908541 errors:0 dropped:0 overruns:0 frame:0
          TX packets:165908541 errors:0 dropped:0 overruns:0 carrier:0
          collisions:0 txqueuelen:0
          RX bytes:17088362635 (17.0 GB) TX bytes:17088362635 (17.0 GB)

virbr0 Link encap:Ethernet HWaddr 1a:e7:c5:94:53:7c
          inet addr:192.168.122.1 Bcast:192.168.122.255 Mask:255.255.255.0
          UP BROADCAST RUNNING MULTICAST MTU:1500 Metric:1
          RX packets:0 errors:0 dropped:0 overruns:0 frame:0
          TX packets:4979 errors:0 dropped:0 overruns:0 carrier:0
          collisions:0 txqueuelen:0
          RX bytes:0 (0.0 B) TX bytes:237673 (237.6 KB)

wlan0 Link encap:Ethernet HWaddr 68:a3:c4:1e:68:6a
          UP BROADCAST MULTICAST MTU:1500 Metric:1
          RX packets:0 errors:0 dropped:0 overruns:0 frame:0
          TX packets:0 errors:0 dropped:0 overruns:0 carrier:0
          collisions:0 txqueuelen:1000
          RX bytes:0 (0.0 B) TX bytes:0 (0.0 B)