Visual Studio .NET - Ajax and ASP .Net Panels - Issue

I have a web page which contains an Update Panel (Panel 1). In this panel I have a tab strip (ts1)

Each tab item in ts1 has its own simple/regular Panel (say Panel 2). Inside Panel 2, we have another Update Panel (say Panel 3). In Panel 3, we have again a tab strip (ts2). Basically we are providing a nested tab strip, look and feel.

Ajax works on tab click events of ts1, but ajax does not work on tab click events of ts2. Also the tab click events of ts2 are not trigerred.

But if we comment out Panel 2, the tab click events of ts2 are invoked.

Is there an issue with panels and the way ajax works?

But why are you using two update panels... I think for using ajax only one update panel is enough..

Remove the inside update panel and try to run the code.. It will work fine.