Access Denied

Hi ALL

I am faced with a issue of creating database , The issue is I am able
to enter to the MySQL Server with the password, but when i try to
create database I get Access Denied

Below are the details

[root@bde root]# mysql -u root -p
Enter password:
Welcome to the MySQL monitor.  Commands end with ; or \g.
Your MySQL connection id is 17 to server version: 3.23.54

Type 'help;' or '\h' for help. Type '\c' to clear the buffer.

mysql> exit
Bye
[root@bde root]# mysqladmin -u root -p create kaushal
Enter password:
mysqladmin: CREATE DATABASE failed; error: 'Access denied for user:
'root@localhost' to database 'kaushal''

Any Clue will be really appreciated

Thanks

Kaushal