By Brendan O'Brien

(Reuters) - The U.S. government sued a small Minneapolis suburb on Wednesday, accusing it of religious discrimination after local leaders denied a Muslim group the right to open a center in the municipality.

The Justice Department filed a complaint in U.S. District Court in Minneapolis against St. Anthony Village, where council members voted 4-1 in 2012 to deny a request by the Abu Huraira Islamic Center to create a place of worship in the basement of the St. Anthony Business Center.

"Religious freedom is one of our most cherished rights, and there are few aspects of that right more central than the ability of communities to establish places for collective worship," Molly Moran, acting assistant attorney general for the Civil Rights Division, said in a statement.

The complaint argues the municipality treated the group's application for a conditional use permit on less than equal terms than other, non-religious, conditional use permits for assembly.

The denial of the permit unlawfully prohibited religious use because the zoning code for where the building is located allowed “assemblies, meeting lodges and convention halls,” the Justice Department said.

St. Anthony Village, northeast of Minneapolis, said in a statement the decision to deny the permit was not based on religion, but rather on its limited supply of industrial space where jobs can be created.

(Reporting by Brendan O'Brien in Milwaukee; Editing by Victoria Cavaliere and Peter Cooney)