Question: I'm was following <http://googcloudlabs.appspot.com/> tutorial to create new Google App Engine project. It throws me an error as per below when I try to run the from my local host, but when I deployed it working fine. (<http://mynewcloudcom.appspot.com/>). Please help.

```
HTTP ERROR: 503
Problem accessing /. Reason:
SERVICE_UNAVAILABLE
Powered by Jetty://

```

Eclipse Console

```
Mar 05, 2012 10:42:46 AM com.google.apphosting.utils.jetty.JettyLogger info
INFO: Logging to JettyLogger(null) via com.google.apphosting.utils.jetty.JettyLogger
Mar 05, 2012 10:42:46 AM com.google.apphosting.utils.config.AppEngineWebXmlReader readAppEngineWebXml
INFO: Successfully processed C:\Smartag_Eclipse_Project\DontEditProject\war\WEB-INF/appengine-web.xml
Mar 05, 2012 10:42:46 AM com.google.apphosting.utils.config.AbstractConfigXmlReader readConfigXml
INFO: Successfully processed C:\Smartag_Eclipse_Project\DontEditProject\war\WEB-INF/web.xml
Mar 05, 2012 6:42:48 PM com.google.appengine.tools.development.DevAppServerImpl start
INFO: The server is running at http://localhost:8888/
Mar 05, 2012 6:42:48 PM com.google.appengine.tools.development.DevAppServerImpl start
INFO: The admin console is running at http://localhost:8888/_ah/admin

```

Answer: 
When using `Java 1.7`, also check for the Execution Environment and set it to `JavaSE-1.7`.

You can look into the Execution Environment in:

`Right Click` -> `Properties` -> `Java Compiler` 

And you have the option above `Restore Defaults` and `Apply`.
I had a condition where a servlet defined in the web.xml with non existent class name. I specified proper class name, worked!