$ aptitude install squid

$ mv -v /etc/squid/squid.conf /etc/squid/squid.conf.bak
$ nano /etc/squid/squid.conf

auth_param basic program /usr/lib/squid/ncsa_auth /etc/squid/passwd
auth_param basic children 5
auth_param basic realm Squid proxy-caching web server
auth_param basic credentialsttl 2 hours
auth_param basic casesensitive off
acl ncsa_users proxy_auth REQUIRED
http_access allow ncsa_users
acl all src all
http_port 3128
hosts_file /etc/hosts
coredump_dir /var/spool/squid
visible_hostname squid.your-domain.com
cache_mgr [email protected]
shutdown_lifetime 3 seconds
cache_mem 32 MB
cache_dir diskd /var/spool/squid 200000 16 256

$ touch /etc/squid/passwd
$ htpasswd /etc/squid/passwd USERNAME

$ service squid restart