Your options file should contain at least the following:
ipcp-accept-local ipcp-accept-remote proxyarp noauth |
The third line is very important. From the pppd man page:
proxyarp
Add an entry to this system's ARP [Address Resolu-
tion Protocol] table with the IP address of the
peer and the Ethernet address of this system. This
will have the effect of making the peer appear to
other systems to be on the local ethernet.
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