directing 2012 server to Wsus server

Hi,

I am trying to direct newly install 2012 server to our Wsus server for updates. Wsus server version is 3.0 sp2 with kb2734608 installed.  Updates are detected but download always fails. Here is the log,

2013-09-0612:30:01:50927675cDnldMgr***********  DnldMgr: New download job [UpdateId = {D53FDCE1-16BE-4855-A4CB-5EAC8A9537CD}.101]  ***********
2013-09-0612:30:01:50927675cDnldMgrWARNING: Update validation failed, error 80246003.
2013-09-0612:30:01:50927675cDnldMgrFATAL: DM:CAgentDownloadManager::DownloadUpdate: pDownloadJob->Init failed with 0x80246003.
2013-09-0612:30:01:50927675cDnldMgrWARNING: Got error (hr = 80246003) starting update 0 in call 5. Notifying call.
2013-09-0612:30:01:50927675cDnldMgrError 0x80246003 occurred while downloading update; notifying dependent calls.
2013-09-0612:30:01:5092761580AU>>##  RESUMED  ## AU: Download update [UpdateId = {CBEC2209-5E1C-4407-8933-9B5B965C9AF0}]
2013-09-0612:30:01:5092761580AU # WARNING: Download failed, error = 0x80246003
2013-09-0612:30:01:5092761580AU#########
2013-09-0612:30:01:5092761580AU##  END  ##  AU: Download updates
2013-09-0612:30:01:5092761580AU#############
2013-09-0612:30:01:50927675cDnldMgrFATAL: DM:CAgentDownloadManager::LoadUpdateMetadataFromDatastore: GetUpdates failed with 0x80248007.
2013-09-0612:30:01:5256108230WUAppFATAL: Failed to call GetUpdateData for updates, hr=80248007, lcid=00000409
2013-09-0612:30:01:5256108230WUAppWARNING: Failed to load the update list, error 80248007
2013-09-0612:30:01:5256108230WUAppWARNING: Failed to populate update list with error 80248007
2013-09-0612:30:01:5416108230WUAppFATAL: Failed to call GetUpdateData for updates, hr=80248007, lcid=00000409
2013-09-0612:30:01:5416108230WUAppWARNING: Failed to load the update list, error 80248007
2013-09-0612:30:01:5416108230WUAppWARNING: Failed to populate update list with error 80248007
2013-09-0612:30:01:5416108230WUAppWARNING: Error 0x80248007 refreshing update list; Ignoring the error
2013-09-0612:30:01:5252761504AUWARNING: GetUpdateMetadata2 failed, error = 0x80248007
2013-09-0612:30:01:5412761504AUWARNING: GetUpdateMetadata2 failed, error = 0x80248007
2013-09-0612:30:03:02527675cReportREPORT EVENT: {812935B5-1DEC-4924-9091-CF78420D25DF}2013-09-06 12:29:58:024+03001147 [AGENT_DETECTION_FINISHED]101{00000000-0000-0000-0000-000000000000} 00AutomaticUpdatesSuccessSoftware SynchronizationWindows Update Client successfully detected 1 updates.
2013-09-0612:30:03:02527675cReportREPORT EVENT: {D1260B0F-EE1B-4551-A177-AC49970A7976}2013-09-06 12:29:58:024+03001156 [AGENT_STATUS_30]101{00000000-0000-0000-0000-000000000000} 00AutomaticUpdatesSuccessPre-Deployment CheckReporting client status.
2013-09-0612:30:03:02527675cReportREPORT EVENT: {03574466-EE2E-4B3F-ACC1-FC646D166016}2013-09-06 12:30:01:509+03001161 [AGENT_DOWNLOAD_FAILED]101{CBEC2209-5E1C-4407-8933-9B5B965C9AF0} 10180246003 AutomaticUpdatesFailureContent DownloadError: Download failed.
2013-09-0612:30:03:02527675cReportWARNING: CSerializationHelper:: InitSerialize failed : 0x80070002
2013-09-0612:30:03:02527675cReportWARNING: CSerializationHelper:: InitSerialize failed : 0x80070002
2013-09-0612:30:03:02527675cReportCWERReporter::HandleEvents - WER report upload completed with status 0x8
2013-09-0612:30:03:02527675cReportWER Report sent: 7.8.9200.16604 0x80246003 CBEC2209-5E1C-4407-8933-9B5B965C9AF0 Download 101 Managed
2013-09-0612:30:03:02527675cReportCWERReporter finishing event handling. (00000000)
2013-09-0612:43:10:265276170cAU###########  AU: Uninitializing Automatic Updates  ###########
2013-09-0612:43:10:406276170cWuTaskUninit WU Task Manager
2013-09-0612:43:10:500276170cService*********
2013-09-0612:43:10:500276170cService**  END  **  Service: Service exit [Exit code = 0x240001]
2013-09-0612:43:10:500276170cService*************

Any ideas?

Regards,

Onur