Failed to update data source credentials: The credentials provided for the Fhir source are invalid.

Hello harikrishna_m,
Thank you for providing an update on the issue.

The fact that you only see Dataflow Gen1 and not Dataflow Gen2 when creating a new item indicates that Dataflow Gen2 is likely disabled at the tenant or capacity level. Here’s how to enable it:

• A Fabric tenant admin should go to the Microsoft Fabric Admin Portal >>navigate to Tenant Settings and look for a setting like "Enable Dataflow Gen2 " or "Allow Preview Features." Ensure it’s enabled for your organization or security group.
• Also, check the Capacity Settings for your F64 capacity in the Admin Portal. Under workload or feature settings, ensure Dataflow Gen2 is enabled.

You’ve correctly identified that the cross-tenant setup is causing the connectivity issue. The Azure API for FHIR in Tenant A uses a private endpoint, so Fabric in Tenant B cannot access it directly. Please consider the below option:

• Deploy an Azure Function or API Management (APIM) instance in Tenant A with a public endpoint. The Function/APIM authenticates with the FHIR API (using OAuth 2.0) within Tenant A and accesses it over the private endpoint. Fabric in Tenant B then connects to this public endpoint.

I trust this information proves useful. If it does, kindly “Accept as solution” and give it a 'Kudos' to help others locate it easily.
Thank you.