I am a linux newbie.

At the moment I have a proxy and all the users have to configure it in the browser to access internet.

I want to make the users able to browse even without configuring the proxy in the browser. but eventually it should be received in the proxy rather than giving an error to the user. I heard with transparent proxy I can redirect all the traffic from a particular network, to a particular host( ie my existing proxy).

I tried this using firewall rules. But then the existing proxy doesn't understand the protocol of the requests. I heard that it should be in the kind of proxy protocol.

can anybody help me with this?

Have you seen http://tldp.org/HOWTO/TransparentProxy.html ? It looks like you hace succeeded to do the routing part, but configuring proxy is still needed. Maybe you need to replace "virtual" option recommended in this manual with "transparent" present in modern Squid.

If you need to you something else than Squid, name it.