Why HostedEngine Deployment Fails with error: 'Cannot setup Hosted Engine with connected storage pools' in Red Hat Enterprise Virtualization 3.5?

Issue

• Getting an error while trying to add an additional Host for HostedEngine setup:

# hosted-engine --deploy
[ INFO  ] Stage: Initializing
[ INFO  ] Generating a temporary VNC password.
[ INFO  ] Stage: Environment setup
          Continuing will configure this host for serving as hypervisor and create a VM where you have to install oVirt Engine afterwards.
          Are you sure you want to continue? (Yes, No)[Yes]: Yes
          Configuration files: []
          Log file: /var/log/ovirt-hosted-engine-setup/ovirt-hosted-engine-setup-20160224223824-ypvnna.log
          Version: otopi-1.3.2 (otopi-1.3.2-1.el7ev)
[ INFO  ] Hardware supports virtualization
[ INFO  ] Bridge rhevm already created
[ INFO  ] Stage: Environment packages setup
[ INFO  ] Stage: Programs detection
[ INFO  ] Stage: Environment setup
[ INFO  ] Stage: Environment customization

          --== STORAGE CONFIGURATION ==--

          During customization use CTRL-D to abort.
[ ERROR ] The following storage pool has been found connected: 00000002-0002-0002-0002-000000000108
[ ERROR ] Failed to execute stage 'Environment customization': Cannot setup Hosted Engine with connected storage pools
[ INFO  ] Stage: Clean up
[ INFO  ] Generating answer file '/var/lib/ovirt-hosted-engine-setup/answers/answers-20160224223829.conf'
[ INFO  ] Stage: Pre-termination
[ INFO  ] Stage: Termination