You need to include host name / IP in database connection string. Instead of "/home/XXX/database.fdb" you should use "localhost:/home/XXX/database.fdb"

If you omit that, isql will access database directly (not using service). But it has no read access rights for password database (security2.fdb) located elsewhere.
It will work however if you run it as root:
"sudo isql-fb ..."