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Could not connect to the report server http://localhost/reportserver

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I currently have SQL2k8 R2 Reporting services on client machine (Windows 7). I created and deployed reports on this machine. Everything works perfect. I need to move everything to Server machine (W2k8 R2). I installed SQL2k8 R2 and copied the solution have that I have on client machine. I can open rdl files on server machine but when I deploy reports I get the below error: ******************TITLE: Microsoft SQL Server Report Designer------------------------------Could not connect to the report server http://localhost/ReportServer. Verify that the TargetServerURL is valid and that you have the correct permissions to connect to the report server.------------------------------ADDITIONAL INFORMATION:Unable to connect to the remote server (System)*********************I compared server to client machine and checked all the settings are similar in RS configuration manager. However, After I connect to report server, I get similar error (precisely: 'unable to connect to remote server') when I expand any of nodes (Jobs, Security etc). Similar error when I open http://localhost/ReportServer in internet explorer. I tried running RS with domain account, network service account, local system account but of no luck.What else could I be missing here ?

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