Coolify uses SSH to connect to your server and deploy your application, even if you are using only the localhost server - where Coolify is running on. To validate your configuration, make sure the followings are set on your server.
Some commands may vary based on your Linux distribution.
Make sure the SSH key does not have a passphrase. Connection will fail if the key has a passphrase.
1

SSH Enabled

Make sure SSH is enabled and you can connect to your server with SSH from your local machine with root user.

# Ubuntu/Debian

sudo apt install openssh-server
sudo systemctl status sshd

# CentOS/RHEL

sudo yum install openssh-server
sudo systemctl status sshd

# Arch Linux

sudo pacman -S openssh
sudo systemctl status sshd

# Alpine Linux

sudo apk add openssh
sudo rc-service sshd status

# SLES/openSUSE

sudo zypper install openssh
sudo systemctl status sshd
2

Root Login

Make sure PermitRootLogin is set to yes or without-password or prohibit-password in /etc/ssh/sshd_config file.
# Check the current value
grep PermitRootLogin /etc/ssh/sshd_config

# If the value is not `yes` or `without-password` or `prohibit-password`, change it and make sure it is not commented out.
# If it is commented out, remove the `#` character at the beginning of the line.

sudo vi /etc/ssh/sshd_config

# You can exit the editor by pressing `Esc` and then `:wq` and then `Enter` keys - thank me later.

# Restart the SSH service
# Ubuntu/Debian/CentOS/RHEL/Arch Linux/SLES/openSUSE
sudo systemctl restart sshd

# Alpine Linux
sudo rc-service sshd restart
3

SSH Key set on the Server

Make sure an SSH key is added to the ~/.ssh/authorized_keys file. If you installed Coolify with the automated script, you don’t need to do anything else.If you installed Coolify manually, you need to add an SSH key to the ~/.ssh/authorized_keys file.
Make sure the SSH key does not have a passphrase. Connection will fail if the key has a passphrase.
# Create a new SSH key pair ed25519 (recommended) or rsa (legacy) with the following command.

# The key needs to be created in the `/data/coolify/ssh/keys` directory with,
# id.root@host.docker.internal name,
# no passphrase,
# root@coolify comment.

ssh-keygen -t ed25519 -a 100 -f /data/coolify/ssh/keys/id.root@host.docker.internal -q -N "" -C root@coolify
chown 9999 /data/coolify/ssh/keys/id.root@host.docker.internal

# Copy the public key to the `authorized_keys` file
cat /data/coolify/ssh/keys/id.root@host.docker.internal.pub >>~/.ssh/authorized_keys

# Set the correct permissions
chmod 600 ~/.ssh/authorized_keys
chmod 700 ~/.ssh
4

SSH Key set in Coolify

Add the private key to Coolify at Keys & Tokens menu -> Private Keys and set this new key in the localhost server settings.