diff --git a/pisi/api.py b/pisi/api.py
index 77ff5803..f46d359d 100644
--- a/pisi/api.py
+++ b/pisi/api.py
@@ -295,7 +295,7 @@ def check(package):
                 ctx.ui.info("OK", False)
     return corrupt
 
-def index(dirs=None, output = 'pisi-index.xml', skip_sources=False):
+def index(dirs=None, output='pisi-index.xml', skip_sources=False, skip_signing=False):
     """accumulate PISI XML files in a directory"""
     index = Index()
     if not dirs:
@@ -304,7 +304,11 @@ def index(dirs=None, output = 'pisi-index.xml', skip_sources=False):
         repo_dir = str(repo_dir)
         ctx.ui.info(_('* Building index of PISI files under %s') % repo_dir)
         index.index(repo_dir, skip_sources)
-    index.write(output, sha1sum=True, compress=File.bz2, sign=File.detached)
+
+    if skip_signing:
+        index.write(output, sha1sum=True, compress=File.bz2, sign=None)
+    else:
+        index.write(output, sha1sum=True, compress=File.bz2, sign=File.detached)
     ctx.ui.info(_('* Index file written'))
 
 def add_repo(name, indexuri):
diff --git a/pisi/cli/commands.py b/pisi/cli/commands.py
index c1a385b7..7f53c5d3 100644
--- a/pisi/cli/commands.py
+++ b/pisi/cli/commands.py
@@ -730,16 +730,23 @@ source and binary packages.
         self.parser.add_option("-S", "--skip-sources", action="store_true",
                                default=False,
                                help=_("do not index pisi spec files."))
+        self.parser.add_option("-G", "--skip-signing", action="store_true",
+                               default=False,
+                               help=_("do not sign index."))
 
     def run(self):
         
         self.init(database = True, write = False)
         from pisi.api import index
         if len(self.args)>0:
-            index(self.args, ctx.get_option('output'), skip_sources = ctx.get_option('skip_sources'))
+            index(self.args, ctx.get_option('output'),
+                  skip_sources = ctx.get_option('skip_sources'),
+                  skip_signing = ctx.get_option('skip_signing'))
         elif len(self.args)==0:
             ctx.ui.info(_('Indexing current directory.'))
-            index(['.'], ctx.get_option('output'), skip_sources = ctx.get_option('skip_sources'))
+            index(['.'], ctx.get_option('output'),
+                  skip_sources = ctx.get_option('skip_sources'),
+                  skip_signing = ctx.get_option('skip_signing'))
         self.finalize()
 
 
diff --git a/pisi/file.py b/pisi/file.py
index 7bdf7ad1..ac904c3e 100644
--- a/pisi/file.py
+++ b/pisi/file.py
@@ -162,13 +162,10 @@ class File:
         "this method must be called at the end of operation"
         self.__file__.close()
         if self.mode == File.write:
+            compressed_file = None
             if self.compress == File.bz2:
-                bz2file = self.localfile + ".bz2"
-                bz2.BZ2File(bz2file, "w").write(open(self.localfile, "r").read())
-
-                # FIXME: I hate side effects, but this is designed
-                # that way :(. -- baris
-                self.localfile = bz2file
+                compressed_file = self.localfile + ".bz2"
+                bz2.BZ2File(compressed_file, "w").write(open(self.localfile, "r").read())
 
             elif self.compress == File.sevenzip:
                 raise Error(_("sevenzip compression not supported yet"))
@@ -178,10 +175,17 @@ class File:
                 cs = file(self.localfile + '.sha1sum', 'w')
                 cs.write(sha1)
                 cs.close()
+                if compressed_file:
+                    sha1 = pisi.util.sha1_file(compressed_file)
+                    cs = file(compressed_file + '.sha1sum', 'w')
+                    cs.write(sha1)
+                    cs.close()
 
             if self.sign==File.detached:
                 pisi.util.run_batch('gpg --detach-sig ' + self.localfile)
-                
+                if compressed_file:
+                    pisi.util.run_batch('gpg --detach-sig ' + compressed_file)
+
     @staticmethod
     def check_signature(uri, transfer_dir, sign=detached):
         if sign==File.detached:
diff --git a/pisi/index.py b/pisi/index.py
index fd9448de..074a26fa 100644
--- a/pisi/index.py
+++ b/pisi/index.py
@@ -67,8 +67,18 @@ class Index(XmlFile):
 	    urlfile = file(pisi.util.join_path(tmpdir, 'uri'), 'w')
 	    urlfile.write(filename) # uri
 
-        self.read(filename, tmpDir=tmpdir, sha1sum=not force, 
-                  compress=File.bz2, sign=File.detached)
+
+        # FIXME: This is a mess, we have a compress flag and we have to
+        # use it with filename extention. Because File.decompress also
+        # checks the extension. We really have to go all over the code
+        # and simplify it. -- baris
+        if filename.endswith(".bz2"):
+            self.read(filename, tmpDir=tmpdir, sha1sum=not force, 
+                      compress=File.bz2, sign=File.detached)
+        else:
+            self.read(filename, tmpDir=tmpdir, sha1sum=not force,
+                      compress=None, sign=File.detached)
+
         if not repo:
             repo = self.distribution.name()