Web Service Hosted In IIS - Error ?

Software Specification: .NET Framework 2.0, Web Services Enhancements (WSE) 3.0
 
I have developed a WSE enabled web service that uses mutual certificate assertion. then i created a virtual directory for this service in C:\Inetpub\wwwroot. Then i opened "inetmgr" and created a application for the service.
 
I have developed a web application that uses the above said web service. Then i enabled the WSE settings for the
In that these are the steps i used to create a proxy for that web service:
1. right click the application and click "Add web reference",
2. in the Add web reference window that appeared i selected "Web services in local machine" and selected the above web service and clicked "Add reference".
Now i instantiated the proxy as
webserviceproxy.webserviceWse object=new webserviceproxy.webserviceWse();
object.SetPolicy("clientsidepolicy");
Then called the web method as
object.webmethod();
 
Now when i execute this application i receive the error message :"Security requirements are not satisfied because the security header is not present in the incoming message."
 
But when i create a proxy by choosing "Web services in this solution" from the Add Web Reference window , everything works fine.
Though i visited a lot of forums i am not able to solve this problem.

I have attached the client side and server side policy files for your reference.(attachment 1 is server side policy file and attachment 2 is client side policy)