An error occured while installing pg (0.9.0), and Bundler cannot continue. (Bug #728)

System Information:
-------------------
ubuntu@gtt-ubuntu:~/chiliproject$ ruby -v
ruby 1.9.2p290 (2011-07-09 revision 32553) [x86_64-linux]

ubuntu@gtt-ubuntu:~/chiliproject$ uname -a
Linux gtt-ubuntu 2.6.32-32-generic #62-Ubuntu SMP Wed Apr 20 21:52:38 UTC 2011 x86_64 GNU/Linux

The executed command which results in error:
--------------------------------------------
ubuntu@gtt-ubuntu:~/chiliproject$ bundle install
Fetching source index for http://rubygems.org/
Installing rake (0.9.2.2)
Installing activesupport (2.3.14)
Installing rack (1.1.2)
Installing actionpack (2.3.14)
Installing actionmailer (2.3.14)
Installing activerecord (2.3.14)
Installing activeresource (2.3.14)
Installing archive-tar-minitar (0.5.2)
Installing coderay (0.9.8)
Installing columnize (0.3.4)
Installing edavis10-object_daddy (0.4.3)
Installing i18n (0.4.2)
Installing json (1.6.1) with native extensions
Installing ruby_core_source (0.1.5)
Installing linecache19 (0.5.12) with native extensions
Installing metaclass (0.0.1)
Installing mocha (0.10.0)
Installing mysql2 (0.2.17) with native extensions
Installing pg (0.9.0) with native extensions
Gem::Installer::ExtensionBuildError: ERROR: Failed to build gem native extension.

• extconf.rb failed ***
  Could not create Makefile due to some reason, probably lack of
  necessary libraries and/or headers. Check the mkmf.log file for more
  details. You may need configuration options.

/home/ubuntu/.rvm/rubies/ruby-1.9.2-p290/bin/ruby extconf.rb 
checking for pg_config... no
checking for libpq-fe.h... no
Can't find the 'libpq-fe.h header

Provided configuration options:
--with-opt-dir
--without-opt-dir
--with-opt-include
--without-opt-include=${opt-dir}/include
--with-opt-lib
--without-opt-lib=${opt-dir}/lib
--with-make-prog
--without-make-prog
--srcdir=.
--curdir
--ruby=/home/ubuntu/.rvm/rubies/ruby-1.9.2-p290/bin/ruby
--with-pg
--without-pg
--with-pg-config
--without-pg-config
--with-pg-dir
--without-pg-dir
--with-pg-include
--without-pg-include=${pg-dir}/include
--with-pg-lib
--without-pg-lib=${pg-dir}/lib
--enable-static-build
--disable-static-build

Gem files will remain installed in /home/ubuntu/.rvm/gems/ruby-1.9.2-p290/gems/pg-0.9.0 for inspection.
Results logged to /home/ubuntu/.rvm/gems/ruby-1.9.2-p290/gems/pg-0.9.0/ext/gem_make.out
An error occured while installing pg (0.9.0), and Bundler cannot continue.
Make sure that `gem install pg -v '0.9.0'` succeeds before bundling.