I have just installed GitLab.
I created a project called project-x.
I have created few users and assigned it to the project.
Now I tried to clone:
The Solution from https://github.com/gitlabhq/gitlab-shell/issues/46 worked for me.
By setting the permissions:
chmod 700 /home/git/.ssh chmod 600 /home/git/.ssh/authorized_keys
password prompt disappears.