error 500 running WP on subdomain

I want to run WP from subdomain.domain.com, get error 500.

– My domain.com is hosted on 1and1. I created a subdomain, and that works fine (subdomain.domain.com redirects to domain.com/subdomain with no problem).
– Copied WP files to domain.com/subdomain, run subdomain.domain.com/wp-admin/install.php and worked fine.
– Changed in Options Blog address (URL): https://subdomain.domain.com
– Changed permalinks to Date and name based
https://subdomain.domain.com/2008/02/08/sample-post/
– When I try to view the site, I get error 500
– If I change back Blog address (URL) to https://domain.com/subdomain it works fine, however permalinks have the format
https://domain.com/subdomain/2008/02/08/sample-post/ instead of
https://subdomain.domain.com/2008/02/08/sample-post/

Is it possible to have all permalinks with subdomain.domain.com base url?

Thanks