Handling of HTTPS traffic by a HTTP proxy

[Gowtham V]

We have a explicit http proxy in our environment, in which i faced an issue with a HTTPS site. I would like to know how a HTTP proxy handles a HTTPS traffic?

I Understand that there are two handshake happening here, 

1. From Client machine to WSA appliance. (using proxy port)

2. From WSA to public server. (Actual traffic eg: http/https)

How does a SSL/TLS negotiation happen here on both the steps above?

Lets say my browser has only SSL 3.0 and TLS 1.0 enabled.

[Tom Foucha]

Unless you are doing decryption on the HTTPS traffic it simply tunnels the traffic via the TCP_CONNECT on port 443. Now because you say you are doing explicit chances are you are running over a single port like 80, 8080 or 3128 in most cases. If you are not doing any HTTPS inspection the WSA simply forwards the certificates requests back and forth via the tunnel and doesn't interfere.