Here is what I got.
root@ubuntu:/home/john# virsh start ubuntu2
error: Failed to start domain ubuntu2
error: internal error Process exited while reading console log output: char device redirected to /dev/pts/1
bind(unix:/var/lib/libvirt/qemu/ubuntu2.libguestfs): Permission denied
chardev: opening backend "socket" failed: Permission denied

root@ubuntu:/home/john# ll /var/lib/libvirt/qemu/
total 20
drwxr-x--- 5 libvirt-qemu kvm  4096 Jul  5 14:44 ./
drwxr-xr-x 8 root         root 4096 May 20 04:18 ../
drwxr-xr-x 2 libvirt-qemu kvm  4096 May 20 04:18 dump/
drwxr-xr-x 2 libvirt-qemu kvm  4096 May 20 04:18 save/
drwxr-xr-x 2 libvirt-qemu kvm  4096 May 20 04:18 snapshot/

root@ubuntu:/home/john# cat /etc/libvirt/qemu/ubuntu2.xml
<!--
WARNING: THIS IS AN AUTO-GENERATED FILE. CHANGES TO IT ARE LIKELY TO BE
OVERWRITTEN AND LOST. Changes to this xml configuration should be made using:
  virsh edit ubuntu2
or other application using the libvirt API.
-->

<domain type='kvm' xmlns:qemu='/schemas/domain/qemu/1.0'>
<qemu:commandline>
  <qemu:arg value='-s'/>
</qemu:commandline>
  <name>ubuntu2</name>
  <uuid>03f4c36d-9509-05dd-167d-d2613d1dd883</uuid>
  <memory>1024000</memory>
  <currentMemory>1024000</currentMemory>
  <vcpu>1</vcpu>
  <os>
    <type arch='x86_64' machine='pc-1.0'>hvm</type>
    <boot dev='hd'/>
  </os>
  <features>
    <acpi/>
    <apic/>
    <pae/>
  </features>
  <clock offset='utc'/>
  <on_poweroff>destroy</on_poweroff>
  <on_reboot>restart</on_reboot>
  <on_crash>restart</on_crash>
  <devices>
    <emulator>/usr/bin/kvm</emulator>
    <disk type='file' device='disk'>
      <driver name='qemu' type='qcow2'/>
      <source file='/home/john/ubuntu-1204-vm.img'/>
      <target dev='hda' bus='ide'/>
      <address type='drive' controller='0' bus='0' unit='0'/>
    </disk>
    <controller type='ide' index='0'>
      <address type='pci' domain='0x0000' bus='0x00' slot='0x01' function='0x1'/>
    </controller>
    <interface type='bridge'>
      <mac address='52:54:00:d4:7d:07'/>
      <source bridge='br0'/>
      <model type='virtio'/>
      <address type='pci' domain='0x0000' bus='0x00' slot='0x03' function='0x0'/>
    </interface>
    <serial type='pty'>
      <target port='0'/>
    </serial>
    <console type='pty'>
      <target type='serial' port='0'/>
    </console>
    <input type='mouse' bus='ps2'/>
    <graphics type='vnc' port='-1' autoport='yes'/>
    <sound model='ich6'>
      <address type='pci' domain='0x0000' bus='0x00' slot='0x04' function='0x0'/>
    </sound>
    <video>
      <model type='cirrus' vram='9216' heads='1'/>
      <address type='pci' domain='0x0000' bus='0x00' slot='0x02' function='0x0'/>
    </video>
    <memballoon model='virtio'>
      <address type='pci' domain='0x0000' bus='0x00' slot='0x05' function='0x0'/>
    </memballoon>
<channel type='unix'>
  <source mode='bind' path='/var/lib/libvirt/qemu/ubuntu2.libguestfs' />
  <target type='virtio' name='org.libguestfs.channel.0' />
</channel>
  </devices>
</domain>

When I deleted the <channel>...</channel> part, it will start normally. But I need it to use guestfish with --live option.