We are using private DNS zones for our internal sites. We are connected to the cloud by site to site vpn on palo alto and until recently our private domains have stopped resolving and name servers are not finding their way. Using dig command I am able to cache some of the addresses on palo alto but they get deleted right away but not all so for now I have added static entries for DNS proxy but the issue is that anything behind a load balancer or with wild card is not working. Is there a work around to this as this seems to be a bug of palo alto?
In your scenario of resolution of Azure hostnames from on-premises computers, the private DNS zone could not help, you need to use your own DNS server for the internal name resolution in this link. Then you need forward queries to your DNS proxy server in the corresponding virtual network, the proxy server forwards queries to Azure for resolution, see use name resolution by your own DNS server.