Executing "hosted-engine --deploy" fails with error 'Failed to execute stage 'Misc configuration': Command '/sbin/service' failed to execute', why?

Issue

The "hosted-engine --deploy" installation script fails, as following:

          Host name for web application      : hosted_engine_1
          Host ID                            : 1
          Image size GB                      : 25
          Storage connection                 : nfs:/data
          Console type                       : vnc
          Memory size MB                     : 4096
          Boot type                          : cdrom
          Number of CPUs                     : 2
          ISO image (for cdrom boot)         : /iso/rhel-server-6.5-beta-x86_64-dvd.iso
          CPU Type                           : model_Westmere

          Please confirm installation settings (Yes, No)[No]: yes
[ INFO  ] Generating answer file '/etc/ovirt-hosted-engine/answers.conf'
[ INFO  ] Stage: Transaction setup
[ INFO  ] Stage: Misc configuration
[ INFO  ] Stage: Package installation
[ INFO  ] Stage: Misc configuration
[ INFO  ] Configuring libvirt
[ INFO  ] Generating VDSM certificates
[ INFO  ] Generating libvirt-spice certificates
[ INFO  ] Configuring VDSM
[WARNING] VDSM configuration file not found: creating a new configuration file
[ INFO  ] Starting vdsmd
[ INFO  ] Waiting for VDSM hardware info
[ INFO  ] Configuring the management bridge
[ ERROR ] Failed to execute stage 'Misc configuration': Command '/sbin/service' failed to execute
[ INFO  ] Stage: Clean up
[ INFO  ] Stage: Pre-termination
[ INFO  ] Stage: Termination