Its interesting that they seem to be saying they dont know the full details of how their customers are using Azure, due to privacy commitments.
https://apnews.com/article/microsoft-azure-gaza-palestine-is...
https://apnews.com/article/microsoft-azure-gaza-israel-prote...
https://apnews.com/article/microsoft-build-israel-gaza-prote...
https://apnews.com/article/microsoft-protest-employees-fired...
The first one seems to be after Microsoft's claim "and Microsoft has said it is reviewing a report in a British newspaper this month that Israel has used it to facilitate attacks on Palestinian targets".
The second one looks similar "Microsoft late last week said it was tapping a law firm to investigate allegations reported by British newspaper The Guardian".
The 3rd one seems to be a genuine example that Microsoft employees were reporting this specific contract violation concern - but I feel like there are more genuine examples I've heard of than just this one report.
The 4th one is a bit unclear, it seems to be a general complaint about the contract - not about specific violations of it.
Perhaps the more confounding question remaining is "what was so different about the report from The Guardian". It's not like these kinds of claims are new, or in small papers only, but maybe The Guardian was able to put together hard evidence from outside that allowed Microsoft to determine things without themselves going in breach of contract details?