I am having the exact same problem now in 2025 with Eclipse 2025-06. I can't find a solution but my research shows that probably JSch needs to updated to use the newest OpenSSH authentication methods.

Just some context: Eclipse used to work fine and synchronizing projects easily. After a major server update, with more stringent security rules, the Eclipse sync failed. As I do not control the server (it is a big IT provider) we need Eclipse to implement more modern tools to make it more secure.

Any suggestions are welcome.