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Encapsulating Security Payload (ESP)
The ESP header is designed to provide a mix of security services in IPv4 and IPv6. ESP may be applied alone, in combination with AH, or in a nested fashion.
Security services can be provided between a pair of communicating hosts, between a pair of communicating security gateways, or between a security gateway and a host. The ESP header is inserted after the IP header and before the next layer protocol header (transport mode) or before an encapsulated IP header (tunnel mode). ESP can be used to provide confidentiality, data origin authentication, connectionless integrity, an anti-replay service (a form of partial sequence integrity), and (limited) traffic flow confidentiality. The set of services provided depends on options selected at the time of Security Association (SA) establishment and on the location of the implementation in a network topology. RFC 4303.
Authentication Header (AH)
The Authentication Header (AH) is an IPSec protocol that provides data integrity, data origin authentication, and optional anti-replay services to IP. Authentication Header (AH) does not provide any data confidentiality (Data encryption). Since Authentication Header (AH) does not provide confidentiality, there is no need for an encryption algorithm. AH protocol is specified in RFC 2402.