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When opening the Services Directory application or connecting to a Web service, the following error message returns:
"Identity Error: Server could not authenticate the supplied identity".
This issue applies to ArcGIS Server for the Microsoft .NET Framework.
The ArcGISWebServices account has not been granted rights to 'Allow log on locally' in the local group policy.
The ArcGISWebServices user account must be added to the access control list for the 'Allow log on locally' policy on the GIS Server machine.