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GRE
As GRE does not have its own mechanism to encrypt traffic it depends on IPsec for getting the encryption job done. As opposed to GRE over IPsec, which encrypts anything that is encapsulated by GRE, IPsec over GRE encrypts only the payload and not the routing protocols running over a GRE tunnel.
IPsec
In IPsec over GRE, the GRE tunnel is established over the internet, neighborship is formed and routes are exchanged and all of this is in clear text. We are only concerned with encrypting the interesting traffic flowing between the two peers. When securing the routing updates and routes isn’t a requirement and the major concern is to encrypt the information/payload flowing between the peers we use IPsec over GRE.
