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1. Re: What is required to have the annotations for JAX-WS recognized by eclipse?
A bit late, but for future reference.
Your project needs to have cxf-manifest.jar in its library build path. I suspect that cxf-manifest specifies all the CXF jars in its manifest file, so all CXF jars might have to be in the same directory as the cxf-manifest.jar
Yes, you need to enable JAX-WS and you can only do it when the project is highlighted in the navigator/project explorer.