How to configure snap-store-proxy on a semi air grapped network

[simonjcarr]

our main network has a proxy server that provides access to the internet. We also have a private network where most machines can not communicate with the main network. There is however one machine on the private network that is running squid and has the main network proxy as a peer.
I have create a ubuntu 22.04 VM on the airgapped network and set it up to use the Squid proxy and have installed snap-store-proxy and postgres following these instructions https://docs.ubuntu.com/snap-store-proxy/en/install

When I check connections "snap-proxycheck-connections" I get the following DNS Errors

sudo snap-proxy check-connections
http: https://dashboard.snapcraft.io: FAILED (dashboard.snapcraft.io:443) dns lookup error
http: https://login.ubuntu.com: FAILED (login.ubuntu.com:443) dns lookup error
http: https://api.snapcraft.io: FAILED (api.snapcraft.io:443) dns lookup error
postgres: localhost: OK 
Not all connections are accessible

I have set the environment variables in /etc/systemd/system/snapd.service.d/snap_proxy.conf to point to the squid proxy and restarted snapd

sudo snap install snap-store-proxy worked OK through the squid proxy
Does Snap Store Proxy require full DNS resolution even when it has access to a http proxy server?