The vendor we deal with requires the use of both password authentication AND a public/private key authentication.

After much pain and testing, this is what we did to make it work, bypassing the need to install phpseclib:

<?php

$server = "subdomain.example.com";
$username = "username";
$password = "password";
$path_to_public_key = "file.pub";
$path_to_private_key = "file.priv"; // critical: permissions must be 0600!!
$path_to_needed_file = "/path/to/file/needed.txt";

$ssh2 = ssh2_connect($server);
@ssh2_auth_pubkey_file($ssh2,$username,$path_to_public_key,$path_to_private_key); // this returns a warning but it is normal and can be ignored
ssh2_auth_password($ssh2,$username,$password);
$sftp = ssh2_sftp($ssh2);
$file = fopen("ssh2.sftp://" . intval($sftp). $path_to_needed_file,"r");
$content = fread($file,1024);
fclose($file);
ssh2_disconnect($ssh2);

echo $content;
?>

If you have a problem with an RSA key, check that private key file contents starts with:

-----BEGIN RSA PRIVATE KEY-----

and not with:

-----BEGIN OPENSSH PRIVATE KEY-----

The first one can be created by:

ssh-keygen -m PEM -t rsa -f mykey

Beware of the tilde (~) in the key file paths, as they will trigger the following warning (on a debug build):

PHP Warning:  String is not zero-terminated (ZZZZZZZZZZZZZZZZZZ1wjj*=?<) (source: Zend/zend_execute.h:81) in Unknown on line 0

although the authentication will suceed.

<?php 
    $ssh_conn = ssh2_connect('test.host.com', 22, array('hostkey' => 'ssh-rsa'));
    ssh2_auth_pubkey_file($ssh_conn, 'user', '~/.ssh/id_rsa.pub', '~/.ssh/id_rsa')
 ?>

The above code will throw the Warning.

<?php 
    $ssh_conn = ssh2_connect('test.host.com', 22, array('hostkey' => 'ssh-rsa'));
    ssh2_auth_pubkey_file($ssh_conn, 'user', '/home/user/.ssh/id_rsa.pub', '/home/user/.ssh/id_rsa')
 ?>

The above code won't.

If you want to perform a dynamic replacement of the tilde, you can use posix_getpwuid (http://php.net/manual/en/function.posix-getpwuid.php)

Users should be aware of bug 78661 https://bugs.php.net/bug.php?id=78661 

As of december 2020, on some Linux distro, (debian 10 and ubuntu 20.04 at least), although the ssh daemon will accept the connection, the function ssh2_auth_pubkey_file stubbornly reports an error.

It took me hours to realise that my code was correct, but the function buggy. If you are hit by this bug, you may try https://www.php.net/ssh2_auth_password instead... If applicable.

This function has a known bug (https://bugs.php.net/bug.php?id=58573) under some Linux installations: you can't encrypt your private key if you've compiled libssh2 using libgcrypt.  According to the bug page, the solution is to rebuild libssh2 with OpenSSL.  (Or don't encrypt your private key, but that seems irresponsible somehow.)

This isn't a bug report -- the bug is apparently already being fixed -- but a note for others, because it took me at least an hour of Googling to realize the problem wasn't with my own code.

On my linux debian server running php communicating with another linux debian server I had problems getting rsa to work. dsa worked out of the box. I got it to work by doing the following in terminal

* ssh-keygen -t rsa
.... PUBFILE 
* ssh-keygen -f PUBFILE -e
OUTPUT

id_rsa.pub =
ssh-rsa OUTPUT [COMMENT]

Well, you have to format the publickey with the following command:

# ssh-keygen -f id_rsa.pub -i
Output: "ssh-rsa <YOURKEYDATA>"

That worked fine for me.

github.com/php/pecl-networking-ssh2/pull/56

ssh2_auth_pubkey(resource $session, string $username, string $pubkey, string $privkey, string $passphrase = ?): resource 

exist to pass both keys as string.

bugs.php.net/patch-display.php?bug=79702&patch=ssh2_fix_nullpointer_deref.patch&revision=1617965812

And you may get a:
"Program received signal SIGSEGV, Segmentation fault."

for some libssh2 versions when not setting a passphrase.

Setting up public key authentication:

1.  Login to the unix server you want to connect using putty.
2.  mkdir .ssh (there is a dot before ssh)
3.  cd .ssh
4.  ssh-keygen -t rsa mykey
5.  Enter passphrase as test
6.  ls -al -> you will find two files mykey , mykey.pub
7.  cat mykey.pub >>authorized_keys
8.  cat mykey
9.  Copy what you get on screen to notepad and save it as "c:\mykey" (within quotes)
10.  cat mykey.pub
11.  Copy what you get on screen to notepad and save it as "c:\mykey.pub" (within quotes)

<?php

function my_ssh_disconnect($reason, $message, $language) 
{
  printf("Server disconnected with reason code [%d] and message: %s\n", $reason, $message);
}

//Open a connection forcing 3des-cbc when sending packets, any strength aes cipher when receiving packets, no compression in either direction, and Group1 key exchange. 
$methods = array(
  'kex' => 'diffie-hellman-group1-sha1',
  'client_to_server' => array(
   'crypt' => 'aes256-cbc',
   'comp' => 'none',
   'mac' => 'hmac-sha1'),
  'server_to_client' => array(
   'crypt' => 'aes256-cbc',
   'comp' => 'none',
   'mac' => 'hmac-sha1'));

$callbacks = array('disconnect' => 'my_ssh_disconnect');

      // Function to run a command on the unix server

      function run_cmd($ssh_host, $user_name, $keyfilename, $ssh_command)
      {
          $connection = ssh2_connect($ssh_host, 22, $methods, $callbacks);
          if (!$connection) die('Connection failed');
          if (ssh2_auth_pubkey_file($connection, $user_name, $keyfilename.".pub", $keyfilename, 'test'))
          {
            echo "Public Key Authentication Successful as user: $user_name";
          }
          else
          {
            die('Public Key Authentication Failed');
          }

          $stream = ssh2_exec($connection, $ssh_command);
          $i=0;
          stream_set_blocking($stream, true);
          $line = stream_get_line($stream, 1024, "\n");
          while (!feof($stream))                                                                               
          {
                  echo $line.' ';
                  $line = stream_get_line($stream, 1024, "\n");
                  $i++;
          }  
          echo "Count : ".$i;
          flush();
          unset($stream);  
      }

      function my_ssh_disconnect($reason, $message, $language)
      {
            printf("Server disconnected with reason code [%d] and message: %s\n",
            $reason, $message);
      }

      // Main Code

      $user_name = "USERID";
      $keydir = "c:\\";
      $search_string = 'needle';
      $keyfilename= $keydir.'mykey';
      $ssh_host = "foo.bar.com";
      $ssh_command = 'grep "'.$search_string.'" /haystack/*.log';
      run_cmd($ssh_host, $user_name, $keyfilename, $ssh_command);

      $ssh_command = 'ls -al';
      run_cmd($ssh_host, $user_name, $keyfilename, $ssh_command);
?>

rsa keys may don't work, using dsa keys are more compatible

Linux:
ssh-keygen -t dsa
cat ~/.ssh/id_dsa.pub >> ~/.ssh/authorized_keys
chmod 700 ~/.ssh/
chmod -R 600 ~/.ssh/*

PHP:
<?php
    $methods = array(
    'kex' => 'diffie-hellman-group1-sha1',
    'hostkey' => 'ssh-dss',
    'client_to_server' => array(
    'crypt' => '3des-cbc',
    'mac' => 'hmac-md5',
    'comp' => 'none'),
    'server_to_client' => array(
    'crypt' => '3des-cbc',
    'mac' => 'hmac-md5',
    'comp' => 'none'));
    $connect = ssh2_connect('127.0.0.1', 22, $methods);
    if(ssh2_auth_pubkey_file($connect, 'username', '~/.ssh/id_dsa.pub', '~/.ssh/id_dsa'))
    {
        echo "Public Key Authentication Successful\n";
    }
    else
    {
        echo "Public Key Authentication Failed\n";
    }
?>

I had an anoyiing problem with this function, everytime I tried to make it run it responds with an 

Authentication failed for <user> using public key

but when I try directly to connect to the server using
ssh <user>@<domain>
Things works fine...

After lots of intents I realize that local files were read protected from user apache (they were stored at /home/<user>/.ssh directory)

So, if you also have this problem, just make a new directory into a place where apache can read and place there the keys.

The whole thing I do is as follows (Linux & Apache both server and client):

First I create a directory where apache can read

mkdir ~/.newssh_keys
chmod 777 ~/.newssh_keys

(This is a security issue, so maybe you need to realize how to make it safer.)

Then I create keys into local server choosing ~/.newssh_keys/id_dsa as the file to save the key:

ssh-keygen -t dsa
...
Enter file in which to save the key (/home/<user>/.ssh/id_dsa): ~/.newssh_keys/id_dsa
...

Then I have to change permissions to private key
(This is a security issue, so maybe you need to realize how to make it safer.)

chmod 644 ~/.newssh_keys/id_dsa

I copy the public key into the server's .ssh directory
client$ scp id_dsa.pub <remoteuser>@<server_domain>:~/.ssh/

and then I connect myself to the server using traditional ssh in order to append the public key at the end of authorized_keys2 file

server$ cat ~/.ssh/id_dsa.pub >> ~/.ssh/authorized_keys2

and remove the public key in order to be clean
server$ rm ~/.ssh/id_dsa.pub

Finally I use this code into my php script

<?php
// This in order to be sure apache can read public key
// (remove this after debug)
$pub_key = file_get_contents('~/.newssh_keys/id_dsa.pub');
print "<pre>";
var_export($pub_key);
print "</pre>";

// This in order to check private one
// (remove this after debug)
$prv_key = file_get_contents('~/.newssh_keys/id_dsa');
print "<pre>";
var_export($prv_key);
print "</pre>";

// Finally the connection code
$connection = ssh2_connect('<server_domain>', 22, array('hostkey', 'ssh-dss'));
if (ssh2_auth_pubkey_file($connection, '<server_user>',
                          '~/.newssh_keys/id_dsa.pub',
                          '~/.newssh_keys/id_dsa')) {
  echo "Public Key Authentication Successful\n";
} else {
  echo "Public Key Authentication Failed";
}
?>

This is probably incredibly insecure but if you are in a closed environment, you can run it at your own risk. 

I was trying to get ssh access from server A to server B but server A was running apache as 'apache' and 
I needed files on server B that were owned by root. So I needed some way for the apache user to connect 
to server B as root.  Here's what I did (both servers running linux - specifically CentOS4):

1. ssh-keygen -t rsa -f id_rsa  generate with no passphrase
2. append the id_rsa.pub file to server B /root/.ssh/authorized_keys2
3. copy the id_rsa and id_rsa.pub files to a directory like /var/www/.ssh/ 
(happens to be apache's home dir on CentOS)
4. chown -R apache.apache /var/www/.ssh

Then you can connect like this:
$connection = ssh2_connect($server,22,array('hostkey'=>'ssh-rsa'));
if (ssh2_auth_pubkey_file($connection,'root',
'/var/www/.ssh/id_rsa.pub',
'/var/www/.ssh/id_rsa')) {
echo "success!";
}
else
{
echo "no success :-(";
}