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FYI, it has started working for us today. Looks like Apple has resolved the issue.

We are having the same problem.iCloud sign-in page always returns "Authentication Error" with error message "This action could not be completed. Please close the window and try again.". It started happening about a week ago.There is also this error in Chrome browser's website console:Refused to connect to 'https://setup.apple-cloudkit.com/setup/ws/1/oauth/validateToken?prtn=67&host=setup.apple-cloudkit.com&oauth_token=OATTKN8cc36fc2-c4ca-451c-ab63-4b347ac8576c0fb369a34844d952c44c47535cc129604c198a75af4b2e3508d1ecd9d224a1b24361ea1cd3f711eae553ae0dd37b3cf3d48eb32501b52beb5877cb247847aaffa42995dd5ff3f90f0e1eb7e60f2a11aa585a47&oauth_verifier=OATVRF107083a4-4628-461b-b7b3-f386a15885ad1f43826cdaa3baf6eed9f910706b6288a195de7fb56c0c31d698a2aeac375ae453da3e11682850979494786ecdd2f896340716fa347919e651bafbedc23af15abbb6c8479ced1e04a678ef5fbf73abd080e0d1165d3b5ed528b2bd222d91646d585a47' because it violates the following Content Security Policy directive: "connect-src blob: 'self' icloud.com *.icloud.com *.apple.com *.cdn-apple.com *.icloud-content.com *.apple-mapkit.com".