As explained in my post related to the Webdav authentication issue using IE for Office documents on Windows 7, I found that the fix will not work for SSL enabled sites. To support HTTPS you will have to add the following lines in /etc/httpd/conf.d/ssl.conf file.
<VirtualHost>
RewriteEngine On
RewriteCond %{REQUEST_METHOD} ^(OPTIONS|PROPFIND)$ [NC]
RewriteRule ^.*$ – [F,L]
</VirtualHost>
Restart httpd
To generate an SSL certificate you can use OpenSSL library