How to provision federated single sign-on enabled user accounts in Windows Azure AD without using dirsync

Without using dirsync, is it possible to create federated single sign-on enabled user accounts in Azure AD?

I have tried using Set-MsolUserPrincipalName and Set-MsolUser to assign principal name and immutable id. However without success and resulting in error code ACS20012 (MSPPError=-2147190612).

The original thread of this issue

http://social.msdn.microsoft.com/Forums/en-US/WindowsAzureAD/thread/bcb8d97b-0043-46c8-86ee-f7083b21e966