e2e encryption stopped working on ejabberd!

Hi all,
running ver 16.04 with all the requird PEP modules to operate OMEMO encryption.
Just recently the OMEMO plugin is no longer working on newly created accounts in ejabberd.
It has been tested on via gajim and conversations and it is only with newly created accounts; all previously created older accounts work ok.
Seems like the server is not accepting keys generated by clients?
Please help this is a critical malfunction.