system-config-securitylevel rewrites iptables without any lines it does not like (in my case, for example the rule “-I ‘RH-Firewall-1-INPUT’ 1 -s x.x.x.x -j ACCEPT” where x.x.x.x is an ip address) – system-config-securitylevel does not support filtering by source or destination computer (for some reason)

The workaround I found for this is to:
1) create a file called /etc/sysconfig/iptables-custom
2) add the rule to the file. If you need a template for adding rules, look at your /etc/sysconfig/iptables file to see your existing rules
3) edit /etc/init.d/iptables
In the start() function there should be a line that says something like this:
“$IPTABLES-restore $OPT $IPTABLES_DATA”
This means to restore the rules from /etc/sysconfig/iptables
BELOW THIS RULE add a line that says
“$IPTABLES-restore -n < /etc/sysconfig/iptables-custom"
The -n option is important. Without it, you would overwrite all other rules and ONLY have the rules in iptables-custom (meaning system-config-securitylevel wouldn't work any more as it would edit an unused file)

The one thing to keep in mind is that updating/reinstalling iptables will likely rewrite /etc/init.d/iptables, removing the line that adds iptables-custom

service iptables save

And it will write a file in /etc/sysconfig that will be read on startup if the iptables service is enabled in the current runlevel.