Python: `agent-with-foundry-tools` chat fails: `ErrorAn unexpected error occurred. Check your agent config and try resubmitting the request.`

[Menghua1]

Description:
After deploying agent-with-foundry-tools, chatting in the Agent Playground on the Foundry Portal fails with the error:
ErrorAn unexpected error occurred. Check your agent config and try resubmitting the request.

In addition, running Pytest also fails with the error as shown below:

Steps to Reproduce:

1. Initialize the project: azd init --template Azure-Samples/ai-foundry-starter-basic.
2. Initialize AI agent: azd ai agent init -m https://github.com/microsoft-foundry/foundry-samples/blob/main/samples/python/hosted-agents/agent-framework/agent-with-foundry-tools/agent.yaml and select location northcentralus.
3. Run azd up.
4. Navigate to agent playground on the Foundry Portal and enter "How do I create an HTTP-triggered Azure Function in Python?" in the chat.
5. For pytest, copy the folder tests to the root directory.
6. Create a new .env file and add the following content.

AZURE_AI_PROJECT_ENDPOINT=""https://ai-account-bvmg7v2ge46ec.services.ai.azure.com/api/projects/ai-project-mhweb2""
AGENT_VERSION=1
AGENT_TEST_MESSAGE="How do I create an HTTP-triggered Azure Function in Python?"
AGENT_KIND=hosted
AGENT_NAME="af-agent-with-foundry-tools"

7. Run cd tests and pytest test_agent.py -v -s.

Environment:

• Azd version: azd version 1.24.0-beta.1-daily.5804512 (commit 72ee2e17e197ddf43dd3df5bb72307e2e015ab0c).
• AI Agent Extension version: 0.1.8-preview
• Agent: agent-with-foundry-tools
• OS: Windows
• Location: northcentralus.

Expected Behavior:
Chatting is successful on the agent playground, and pytest also works successfully.

@JeffreyCA and @rajeshkamal5050 for notification.

[melionel]

@Menghua1 Please make sure you follow the readme file for this sample and set the AZURE_AI_PROJECT_TOOL_CONNECTION_ID value correctly in your agent.yaml before deploy.

[Menghua1]

@melionel The environment variable $env:AZURE_AI_PROJECT_TOOL_CONNECTION_ID="<your-tool-connection-id>" was set before azd deploy, but this issue persists (both Azure and local Pytest).

When deploying to Azure, is it still necessary to set the AZURE_AI_PROJECT_TOOL_CONNECTION_ID environment variable? It appears this variable is only mentioned in the Running the Agent Locally section.

[melionel]

@Menghua1 when running locally, you need to put it in a local .env file and make sure load this .env file when you start the agent.
when deploy to azure, this value must be set to the actual value in agent.yaml before deploy.

[Menghua1]

@melionel Based on your suggestion, the retest results are as follows:

1. Local pytest
AZURE_AI_PROJECT_TOOL_CONNECTION_ID was set to the actual connection resource ID in tests\.env, e.g./subscriptions/.../resourceGroups/.../providers/Microsoft.CognitiveServices/accounts/.../projects/.../connections/MicrosoftLearn. Pytest still fails, the agent call returns 400 as shown below:

2. Deployed to Azure
Before running azd deploy, agent.yaml was updated to set AZURE_AI_PROJECT_TOOL_CONNECTION_ID to the corresponding actual value /subscriptions/.../resourceGroups/.../providers/Microsoft.CognitiveServices/accounts/.../projects/.../connections/MicrosoftLearn. After deployment, the results of testing the following two messages in the Foundry Portal Agent Playground are:

• Scenario 1: "Hello, what can you do for me?" → responds as expected ✅

• Scenario 2: "How do I create an HTTP-triggered Azure Function in Python?" → fails with “Error network error” ❌

Environment:

• Azd version: azd version 1.24.0-beta.1-daily.5843998 (commit e04533f58fa7ff948fcc5792b174bcd3258c9297).
• AI Agent Extension version: 0.1.9-preview
• Agent: agent-with-foundry-tools
• OS: Windows
• Location: northcentralus.