I am trying to synchronize a user account from Local Client Active Directory onto the Cloud AD, however, the user account is not created on the Cloud AD. When I checked the logs created for ADSync tool, it showed this error:
"Error, The server is not operational."
 
Can anyone throw some light on what could be the reason for the user creation sync failure?

It seems that your requests are unable to reach to the Cloud AD and you can better open the ports mentioned in below kb article on Cloud AD for sorting out this case:
http://portal.hostingcont...-users-attributes.aspx