Hi Yashas,
The firewall processes rules in a top-down approach, evaluating all traffic against the defined rules to determine if it matches an allow or deny condition. If no rule allows the traffic, it is denied by default.
In this scenario Rule collections are processed according to the rule type in priority order, lower numbers to higher numbers from 100 to 65,000. The order is DNAT rules, then Network rules, then Application rules are processed.
For your requirement only App Rule is required as you are doing FQDN filtering, so try that and remove the Network rule.https://learn.microsoft.com/en-us/azure/firewall/domain-filtering-overview
Hope this helps.
JS
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