I used instructions from this link as below:
http://www.windowsitpro.com/Articles/Artic...25935.html?Ad=1On a Win2K system, you can create multiple IPSec policies, but you can assign (i.e., activate) only one of them. IPSec policies consist of one or more rules. Each rule has a packet filter and a specified action that Win2K will execute on any packets that meet the associated filter criteria. You can specify the actions negotiate IP security, permit, or block. Let's create one IPSec policy that consists of one block rule and one permit rule. The block rule will block all packets by default. Then, we'll add a permit rule that will allow packets for the port and source IP address combinations I described earlier.
Open Local Security Settings on your server, maneuver to IP Security Policies on Local Machine, right-click the details pane, and select Create IP Security Policy. Click Next on the wizard's first page, enter Packet Filters as the policy's name, and click Next. Clear the Activate the default response rule check box, then click Next, Finish. Now you have an empty policy, as Figure 1, page 2, shows. Next, create the block rule. To start the Create Security Rule Wizard, click Add on the Rules tab, then click Next on the first three pages. On the fourth page, the wizard asks you to select an authentication method for this rule. Although permit and block rule actions don't use any authentication, Win2K still requires that you configure an authentication method. If your server is in a domain, you can leave Kerberos selected; otherwise, select Use this string to protect the key exchange (preshared key) and enter any text you want as the key. Click Next, and the wizard asks you for an IP filter list. This is the default rule; select All IP Traffic and click Next. The wizard asks for your filter action. Out of the box, Win2K has three actions—Permit, Request Security, and Require Security—but no block action, so click Add to start the Filter Action Wizard, then click Next on the first page. Enter Block for the action's name and click Next. Select Block for the filter action behavior, then click Next, Finish. On the Create Security Rule wizard, select Block, then click Next, Finish. Your policy now contains one rule that blocks all IP traffic.
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*BUT* before I did the above I created a new rule I called "Block Bad IP List" This is where I put in the three bad IPs. In the step above where it says to select "Block all IP Traffic" which was a default rule I selected my new "Block Bad IP List" rule I had created with the 3 bad IPs. Of course I wouldnt want to block all IP Traffic which was used in the example instructions from that page.
Works great for me. That's all I need for now.