fabric problem with ssh

[Tim Arnold]

I am getting started with fabric and trying to connect to any machine in 
my known hosts file. I want fabric to figure out that it doesn't need me 
to enter my password.

My fabfile.py:

from fabric.api import run, env
env.disable_known_hosts=False

def lsfiles():
     run('ls -l ~/')

My console result:

 > fab lsfiles
No hosts found. Please specify (single) host string for connection: 
localhost

[localhost] run: ls -l ~/
[localhost] Passphrase for private key:

... file listing follows ...

How can I get fabric to use my .ssh/known_hosts file?

system details:
Python 2.7.3 (default, Aug 22 2012, 13:09:20)
[GCC 3.4.6 20060404 (Red Hat 3.4.6-11)] on linux2

thanks,
--Tim Arnold