I have got a tunnel set up successfully to Azure but have had to specify the peer identifier by IP address which will not be very stable. Azure support advise that the peer identifier set by azure is dynamic and that some firewall vendors (Cisco, Juniper) do not require the peer identifier to be statically set. On Palo Alto I got:
ike-generic event - peer identifier (type idaddr [10.1.1.2]) does not match remote AzureCloud
Please see Azure VPN with Sonicwall - peer IKE ID for details
Is there any more stable work around?
Since the peerid on the Azure side changes on PA side you would need to be able to identify the peer by using various means instead of IP like FQDN or email address or Key IDinstead of IP. Azure will send local ID as FQDN (i.e.azure.domain.com). PA side should have same for peer ID. You will also need to have both sides in aggressive mode as well (default is main mode). In this case Azure should be initiating tunnel all the time. The sample config on PA looks like this
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