MySQL : transaction within a stored procedure

The basic structure of my stored procedure is,

BEGIN

    .. Declare statements ..

    START TRANSACTION;

        .. Query 1 ..
        .. Query 2 ..
        .. Query 3 ..

    COMMIT;

END

MySQL version: 5.1.61-0ubuntu0.11.10.1-log

Currently, if 'query 2' fails, result of 'query 1' is committed.

• How can I rollback the transaction if any of the query fails?

Take a look at http://dev.mysql.com/doc/refman/5.0/en/declare-handler.html

Basically you declare error handler which will call rollback

START TRANSACTION;

DECLARE EXIT HANDLER FOR SQLEXCEPTION 
    BEGIN
        ROLLBACK;
        EXIT PROCEDURE;
    END;
COMMIT;

Just an alternative to the code by rkosegi,

BEGIN

    .. Declare statements ..

    DECLARE EXIT HANDLER FOR SQLEXCEPTION 
    BEGIN
          .. set any flags etc  eg. SET @flag = 0; ..
          ROLLBACK;
    END;

    START TRANSACTION;

        .. Query 1 ..
        .. Query 2 ..
        .. Query 3 ..

    COMMIT;
    .. eg. SET @flag = 1; ..

END