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I'm not familiar with windows service, so I could just talk from the UWP side and answer the seconde question.
Can I run WinUI3 in windows phone. if not I can use uwp for UI app.
No, you can't run WinUI3 in windows phone. Based on the document: WinUI3 library requires windows 10, 1809 or higher. Windows phone support is ended now and its OS version stops at windows 10, 1709. So you can't run WinUI3 applilcation on windows phone.
You have to create a UWP with target windows 10, 1709 so that the app could run on windows phone.
For your first question, you might need to go to other forums and ask windows service engineers.
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