Magento 1.7 has new REST API and it also has new rewrite rules for .htaccess file. How can I rewrite new rules in nginx?
############################################
## uncomment next line to enable light API calls processing
# RewriteRule ^api/([a-z][0-9a-z_]+)/?$ api.php?type=$1 [QSA,L]
############################################
## rewrite API2 calls to api.php (by now it is REST only)
RewriteRule ^api/rest api.php?type=rest [QSA,L]
Here you go:
location /api {
rewrite ^/api/rest /api.php?type=rest break;
}