<p>I want to build a secure web-service betweeen a Java producer and a Java consumer. I want to authenticate using Active Directory using the domain accounts that the producer and consumer are running under. </p>

<p>Could you give me an example of this? </p>

<p>(ie: AD trusted automated alternative to manual keystores.)</p>

Look at
Spring WS
and the and
security certificate authentication
,
7.2.2.1.3 JaasPlainTextPasswordValidationCallbackHandler
, and
7.2.2.3.3 JaasCertificateValidationCallbackHandler
.
There are some examples that tie this together through additional research.