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In this paper, we propose the use of a distributed service management architecture for state-of-the-art service-enabled grids. The architecture is capable of performing automated resource and network bandwidth partitioning based on registered grid resource properties and monitored grid service demand. A main characteristic is that it enables the use of different service priority schemes and allows for policy-based differentiation between local and foreign service offerings. Resource and network bandwidth partitioning algorithms are introduced and their performance is evaluated on a sample grid topology using NSGrid, an ns-2 based grid simulator. Our results show that the use of this Service Management Architecture improves resource efficiency, simplifies schedule making decisions, reduces the overall complexity of managing the grid system, and at the same time improves grid service QoS support (with regard to job response times) by automatically making grid resource and network service reservations prior to scheduling.