[Rails] Bundle Install ERROR: ERROR: Failed to build gem native extension.

Hello,

I'm trying to setup postgreSQL onto rails on linux and when I type
bundle install this is the error that i get. I guess its not finding
the files

Gem::Installer::ExtensionBuildError: ERROR: Failed to build gem native
extension.

/home/taka/.rvm/rubies/ruby-1.9.3-p194/bin/ruby extconf.rb
checking for bzlib.h... no
checking for BZ2_bzWriteOpen() in -lbz2... no
*** 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.

Provided configuration options:
--with-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/taka/.rvm/rubies/ruby-1.9.3-p194/bin/ruby
--with-bz2-dir
--without-bz2-dir
--with-bz2-include
--without-bz2-include=${bz2-dir}/include
--with-bz2-lib
--without-bz2-lib=${bz2-dir}/lib
--with-bz2lib
--without-bz2lib
libbz2 not found, maybe try manually specifying --with-bz2-dir to find
it?


Gem files will remain installed in
/home/taka/.rvm/gems/ruby-1.9.3-p194/gems/bzip2-ruby-0.2.7 for
inspection.
Results logged to
/home/taka/.rvm/gems/ruby-1.9.3-p194/gems/bzip2-ruby-0.2.7/ext/gem_make.out
An error occurred while installing bzip2-ruby (0.2.7), and Bundler
cannot continue.
Make sure that `gem install bzip2-ruby -v '0.2.7'` succeeds before
bundling.

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