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I have created an item in a list that has item level permissions on. Right now I have set item level permission as follows(I have a strange requirement) - Read Access: 'Read items that were created by the user' & Create and Edit access: 'None'.

I have owner permission(full control) on this site and list as well. I have set the workflow to start on new item creation. I am assuming that workflow uses the permissions of the person who triggers the workflow and since I have created the new item the workflow is using owner permission. But after item creation I am not getting the stage name in the workflow column in my list. When I see workflow settings it shows me '1' in Workflow in Progress. When I click on the three '...' in item and go to advanced->workflow I see that the internal status is set to 'Started'. When I click on the information icon I get a message which makes me believe that the problem is related to required permissions. This is what I see in the information icon - 'Suspend this workflow
Activity in progress

Retrying last request. Next attempt scheduled after 8/22/2018 3:24 AM. Details of last request: HTTP Forbidden to https://o365.sharepoint.com/sites/ECA....

Access denied. You do not have permission to perform this action or access this resource. Retry now' (End of Information)

If we set the item-level permissions on does it overrides owner(full control) permissions? Or the way I have set item level permissions needs a change so that owner(full control) takes effect in the workflow? Appreciate your inputs!

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Found a solution to my own problem. Go to Site Settings -> Site Features and hit activate button on the following setting: 'Workflows can use app permissions -> Allow workflows to read from and to write to all items in this site.'

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