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Manual Backport of PR 23454 to release/1.22.x#23501

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Manual Backport of PR 23454 to release/1.22.x#23501
LordAbhishek wants to merge 1 commit intorelease/1.22.xfrom
abhishek/api-gw-fix-backport

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This is manual backport of PR: #23454 to be merged in consul 1.22.x branch.

Original PR description:
This PR adds api gateway peering unit test cases and fixes couple of issues discussed below with “api gateway when operating in peering”.
Please note: This PR merges 3 other small PRs.
#23369
#23370
#23371

Issues details (Theoretically): API Gateway issue with peering and fix.docx

Details:

  1. Whenever we generate the endpoints config for api-gateway, within makeUpstreamLoadAssignmentForPeerService (xds/endpoints.go), it always fetch local_mesh_gateway_endpoint only from connect-proxy, instead of api-gateway cfgSnap.
    localGw, ok := cfgSnap.ConnectProxy.WatchedLocalGWEndpoints.Get(cfgSnap.Locality.String()).

    If not fixed, api-gateway’s cluster for peering will always endup with no endpoints, when meshGatewayConfig.Mode is local.

    Fixed it to fetch the endpoints based on cfgSnap kind. PR

  2. Whenever we generate the endpoint config for api-gateway, within endpointsFromDiscoveryChain (xds/endpoints.go), it fetches meshGatewayConfig to configure endpoints, if it needs to point to local meshGateway or remote meshGateway.
    Here also, this method always fetches meshGatewayConfig.Mode from connect-proxy, instead of api-gateway. So, mgwMode is always nil and nil defaults to remote meshGatewayConfig.Mode.
    So, even if we configure the mesh-gateway to local, it will always fallback to remote.

    Fixed it to fetch the meshGatewayConfig based on cfgSnap kind. PR

  3. In continuation of issue 2, where we have to fetch the meshGatewayConfig for api-gateway, we never have had the meshGatewayConfig in api-gateway upstreams. 

    Found that handleRouteConfigUpdate (proxycfg/api_gateway.go) which updates the upstreams for api-gateway, was skipping to propagate meshGatewayConfig to upstreams. 

    Fixed it by adding meshGatewayConfig within upstream object. PR

  4. Whenever we generate the cluster config for api-gateway, within makeUpstreamClustersForDiscoveryChain (xds/clusters.go), it always generates the cluster without endpoints.
    As we know that whenever any service upstream endpoints is hostname, we have to send it via clusters config to CDS, because envoy is not able to resolve hostnames as EDS. 

    If not fixed, this would results envoy config without endpoints for some clusters (those whose upstream are of hostname type).

    Fixed it to generate cluster based on upstream endpoint type as done for connect proxy or mesh gateway. PR

How the fix is tested:

Unit test cases:
$ go test ./agent/xds -run 'TestAllResourcesFromSnapshot/.*/api-gateway-with-peers-mesh-mode-(local|remote)-and-upstream-is-(hostname|static)' -count=1 -update

ok github.com/hashicorp/consul/agent/xds 0.491s
$ go test ./agent/xds
ok github.com/hashicorp/consul/agent/xds 1.924s
$ go test ./agent/proxycfg
ok github.com/hashicorp/consul/agent/proxycfg 5.105s

Consul-k8s acceptance tests:

consul-ent PR (same as this one):
Ran the consul-k8s workflow with the patched consul-ent image.
All peering test ran fine on both EKS and Kind.
Kind test: https://github.com/hashicorp/consul-k8s-workflows/actions/runs/22376072101
EKS test: https://github.com/hashicorp/consul-k8s-workflows/actions/runs/22376066354

…r API Gateways when peered and updated the API Gateway updateHandler to propagate mesh gateway config to its upstreams. (#23454)

* Add api gateway peering unit test cases. (#23366)

* add unit test cases for api gateway supporting consul peering

* add compiled xds config golden files after running api-gw golden testcases

* fix(proxyCfg): propogate meshGatewayConfig to upstreams of API gateway (#23369)

* fix(proxyCfg): propogate meshGatewayConfig to upstreams of API gateway

- Fixed handleRouteConfigUpdate to properly propagate meshGatewayConfig to API gateway upstreams, which is required during XDS endpoint and cluster config generation.
- Added TestStateChangedAPIGateway test cases in state_test.go to validate API gateway update handling.
- Added API gateway-specific logging prefix (similar to mesh gateway) to help in debugging.

* fix(xds): correct endpoint config generation for API gateway in peered setups (#23370)

* fix(xds): correct endpoint config generation for API gateway in peered setups

- Previously, API gateway XDS endpoint generation incorrectly relied on cfgSnap.ConnectProxy config (instead of cgfSnap.APIGateway), which caused wrong/no endpoint configuration for peered environments.
- Changes made:
- Updated makeUpstreamLoadAssignmentForPeerService to fetch localGatewayEndpoint based on cfgSnap kind instead of always using cfgSnap.ConnectProxy.
- Updated endpointsFromDiscoveryChain to derive meshGatewayMode based on cfgSnap kind instead of always using cfgSnap.ConnectProxy.
- Recompiled golden test file to reflect fix.

* removed comment

* fix(xds): correct cluster config generation for API gateway in peered setups (#23371)

* fix(xds): correct cluster config generation for API gateway in peered setups

- Updated makeUpstreamClustersForDiscoveryChain to generate cluster config based on upstream endpoint type. Before this fix, it always generated cluster configs without endpoints, which is incorrect when the upstream endpoint type is hostname and mesh-gateway mode is remote; in such cases, endpoints must also be included in the cluster config.

- Added recompiled golden test file to reflect the fix.

* fix lint error

* add changelog

* refresh golden file to remove regexRewrite from route configs
@github-actions github-actions Bot added theme/telemetry Anything related to telemetry or observability theme/envoy/xds Related to Envoy support labels Apr 22, 2026
@LordAbhishek LordAbhishek changed the title Manual Backport of PR 23454 Manual Backport of PR 23454 to release/1.22.x Apr 22, 2026
@LordAbhishek LordAbhishek marked this pull request as ready for review April 22, 2026 18:12
@LordAbhishek LordAbhishek requested review from a team as code owners April 22, 2026 18:12
@LordAbhishek
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LordAbhishek commented Apr 23, 2026

Not required. We do not merge into CE old versions.

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