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`.
The solution working for me is to run appEngineServer from command line using Gradle, as comments in generated build.xml for endpoints module proposes. And gradle config includes option for Java 1.7 compatibility, so it's no reason to use Java 1.6 if You want 1.7:

**gradlew modulename:appengineRun**

> 
> Currently, the appengine gradle plugin's appengine devappserver
>  launch doesn't interact well with Intellij/AndroidStudio's
>  Gradle integration. As a temporary solution, please launch from the command
>  line. ./gradlew modulename:appengineRun
> 
> 
>