IKE is defined in RFC 2409. IKE uses a Diffie-Hellman key exchange to set up a shared secret, from which cryptographic keys are derived. Public key techniques or, alternatively, preshared secrets, are used to mutually authenticate the communicating parties.
IKE incoporates parts of the proposed Oakley protocol.
See also: key-agreement protocol.
Need more material re: IKE design, and a historical perspective.