Can you post your versions?
ruby -v
#=> ruby 1.9.3p125 (2012-02-16 revision 34643) [x86_64-linux]
gem -v
#=> 1.8.19
If your gem command is not current, you can update it like this:
gem update --system
To see if you can connect to rubygems.org using Ruby:
require 'net/http'
require 'uri'
puts Net::HTTP.get URI.parse('https://rubygems.org')
If yes, that's good.
If no, then somehow Ruby is blocked from opening a net connection. Try these and see if any of them work:
curl https://rubygems.org
curl https://rubygems.org --local-port 1080
curl https://rubygems.org --local-port 8080
env | grep -i proxy
If you're using a company machine, or within a company firewall, or running your own firewall, you may need to use a proxy.
For info on Ruby and proxies see http://www.linux-support.com/cms/http-proxies-and-ruby/