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yum (Yellow dog Updater Modified) is a package manager for RPM compatible Linux systems such as CentOS, Fedora core and latest Redhat Enterprise Linux.

So how do you use yum to update / install packages from an ISO of CentOS / FC / RHEL CD?

Creation of yum repositories is handled by a separate tool called createrepo, which generates the necessary XML metadata. If you have a slow internet connection or collection of all downloaded ISO images, use this hack to install rpms from iso images.

Step # 1: Mount an ISO file

Type the following command (replace iso file name with the actual iso file):
# yum install createrepo
# mkdir -p /mnt/iso/{1,2,3}
# mount -o loop /path/to/centos1.iso /mnt/iso/1

Step # 2: Create a repository

Use createrepo to generate the necessary XML metadata. Type the following commands:
# cd /mnt/iso
# createrepo .

Clean repo, enter:
# yum clean all

Step # 3: Create config file

You need to create a repo config file in /etc/yum.repos.d/ directory.
# vi /etc/yum.repos.d/iso.repo
Append following text:
[My ISO Repository]

Save and close the changes.

Now use yum command to install packages from ISO images:
# yum install package-name