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Service Level Agreements (SLAs) play an important role in guaranteeing successful collaborations among autonomous entities in Internet-based Virtual Computing Environment (iVCE). However, traditional static and predefined SLAs are not suitable for the open and dynamic iVCE. This paper proposes a policy-based framework for supporting dynamic and automated SLA negotiations between autonomous entities in iVCE. Requirements or constraints on SLA attributes as well as negotiation strategies of negotiating parties are both specified in policy specifications using a simple but expressive policy language that extends the WS-Policy framework. According to these policies, a negotiation agent will be dynamically created for each negotiation party, which is responsible for SLA negotiations on behalf of its owner party. We have implemented a prototype of our framework and demonstrated our approach through a case study.