The "internal server error - 500" indicates that the server crashed while serving the request. It's a generic error, so lots of things could be going on. However, this error 500 is unusual if the database is set up properly.
My suggestion is to download the log files as explained on the documentation (using Azure Storage Explorer - free tool) and whe you examine the logs you may find there messages related to unable to connect to the database or login failed errors when connecting to Azure SQL. In that case always verify 3 things:
- Ensure that you have a SQL database created properly - it should be listed as a Connection String in the Application Settings for your App Service.
- The firewall settings on Azure SQL database
- The proper login name and password is used to connect to the database.