In 2016.4/2017.1 PetaLinux, the ssh command fails to connect to MicroBlaze boards from the host machine.
This issue occurs because the dropbear service is not running in the background on MicroBlaze.
Once PetaLinux is booted, set the IP address and then run the dropbear service manually on MicroBlaze as shown below.
1) Set the IP address of the target.
# ifconfig eth0 <ip_address> netmask <netmask_value>
2) Run the dropbear service.
# dropbear -F &