I've attached a docker file. It must be run with the --privileged flag for chroot to work.

thank you for this.
I would suggest to install more dependencies using this docker file. The complete list of what I think we should use is:

squashfs-tools  # Required for squashfs file system
git                      # Required, for cloning the source
autoconf                 # Required, for generating build scripts
dpkg-dev                 # Required, used in build scripts
live-helper              # Required, for ISO build
syslinux                 # Required, for ISO build
genisoimage              # Required, for ISO build
make                     # Required, for ISO build
lsb-release              # Required, used by configure script
ssh                      # Optional, for cloning over SSH
sudo                     # Optional, ISO build requires root privileges
fakechroot               # Required, for ISO build
devscripts               # Optional, for building submodules (kernel etc)
kernel-package           # Optional, for building the kernel
libtool                  # Optional, for building certain packages (eg vyatta-op-vpn)
libglib2.0-dev           # Optional, for building vyatta-cfg 
libboost-filesystem-dev  # Optional, for building vyatta-cfg
libapt-pkg-dev           # Optional, for building vyatta-cfg
flex                     # Optional, for building vyatta-cfg
bison                    # Optional, for building vyatta-cfg
libperl-dev              # Optional, for building vyatta-cfg
libnfnetlink-dev         # Optional, for building vyatta-cfg-vpn
vim                      # Optional, vim, vi, nano or other text editor

Also it will help if the container will have mapped at start a volume on the localhost, this will help exporting to the "external" world the iso images built using this docker node.

I have updated the docker file for all the above packages and I've attached it here.
For me it will make sense to have the docker file in github as part of vyos-build repository. What do you think?

I've created this pull request for Dockerfile to vyos-build repository
https://github.com/vyos/vyos-build/pull/15/commits/428c73d96ff745ba61ba834d9d2a42d5dc8ed5cd

The vyos-build repo makes sense. We might want to move our comments at the top of the Dockerfile to a readme since they are runtime related and not build related. It might also make sense to add your comments on why to include each package in the Dockerfile as well.

And you don't need sudo because the container is running as root. Why do you want a text editor in a docker image?

Perfect. I will update the Readme and push again the change.

if we setup the volume as working dir inside the container the mknod function during the make iso process will fail if the docker host is MacOs or Windows.
The error is "mknod: Function not implemented " and is related to how docker engine is implemented to run on Mac and Windows systems

I created the following pull request to simplify the docker build process:
https://github.com/vyos/vyos-build/pull/23

I tested setting the volume as the working dir with the latest docker version on MacOS and did not see the mknod issue. It appears to have been implemented.

I misunderstood the issues @mtudosoiu was talking about. Disregard the above pull request.

New pull request with Linux specific changes:
https://github.com/vyos/vyos-build/pull/24