Azure AD Application Proxy Status code: Forbidden

I have added IIS Server's SPN (http/iisserver, http/iisserver.contoso.local) to the connector server and also set the Kerberos Delegation (any authentication). When the Azure Application INTERNAL AUTHENTICATION METHOD property is set Integrated Windows Authentication I am getting Forbidden error. Microsoft AAD Application Proxy Connector cannot authenticate the user because the backend server responds to Kerberos authentication attempts with an HTTP 401 error.

I am unable to resolve the issue. Am I missing something?

Thanks,

Ram