According to the apache log the error I was getting was the following:
/var/www/wp-content/plugins/akismet/.htaccess: Require not allowed here
I ended up resolving this error by adding the following to the apache2.conf file and restarting the server:
<Directory /var/www/wp-content/plugins/akismet/>
AllowOverride all
</Directory>
Is this the proper solution, or can this be solved in a better way?
Thanks,
Maciej