Users will be authenticated if squid is configured to use proxy_auth ACLs.
Browsers send the user’s authentication credentials in the Authorization request header.
If Squid gets a request and the http_access rule list gets to a proxy_auth ACL, Squid looks for the Authorization header. If the header is present, Squid decodes it and extracts a username and password.
If the header is missing, Squid returns an HTTP reply with status 407 (Proxy Authentication Required). The user agent (browser) receives the 407 reply and then prompts the user to enter a name and password. The name and password are encoded, and sent in the Authorization header for subsequent requests to the proxy. Also see this example Authorization Header from .htaccess files.
NOTE: The name and password are encoded using “base64” (See section 11.1 of RFC 2616). However, base64 is a binary-to-text encoding only, it does NOT encrypt the information it encodes. This means that the username and password are essentially “cleartext” between the browser and the proxy. Therefore, you probably should not use the same username and password that you would use for your account login.