I copied the id_dsa.pub key to authorized keys and now scp works
but I still get following error for SFTP
machine1[/home/user1] ==>
machine1[/home/user1] ==>sftp ~/SFTP_test_file machine2:/home/user2/ftptest
Connecting to /home/user2/SFTP_test_file...
ssh: /home/user2/SFTP_test_file: no address associated with name
Connection closed
machine1[/home/user1] ==>
machine1[/home/user1] ==>
=======================
However this is the public key which I don't want to use. I want to use the private key so that noone else can log in.