UnsupportedClassVersionError 1.7, works with 1.6 settings

I have EAR project, that consists of the following projects:

• TestRemoteEJB
• TestRemoteEJBClient
• TestRemoteWEB

Under each project I have set:

• Under Java Compiler I have set Compiler compliance level to 1.7
• Under Project Facets I have set Java to version 1.7

Also each project has JRE system library set to JRE7. If I use this settings, when I publish on JBoss AS7, I get UnsupportedClassVersionError. If I change the previously specified settings to 1.6 and JRE6, it successfully deploys. Why is that it works under 1.6, but not under 1.7 settings? I have the following setup on my computer.

For x86 I have:

• JRE6
• JRE7

For x64 I have:

• JDK 1.7 (which I found out is pointless as Eclipse uses its own compiler)
• JRE7

I am running Eclipse Indigo SR2 x86 edition, as I had some problems with x64 edition.

Make sure JBoss server pointing to correct Java version.