A Sydney suburb has banned the construction of a synagogue because it could be a terrorist target, a decision that has infuriated religious leaders.

The temple was to be built in Bondi, a short walk from Australia’s famous Bondi Beach. But locals worried that the space would pose a security risk to nearby residents, motorists and pedestrians. As evidence of that threat, the council pointed to the synagogue’s own design, which included setback buildings and blast walls. They also said the design would have an “unacceptable impact” on the street and neighbourhood.

“A number of residents agreed with the contentions ... and provided additional evidence against the development of the site,” the council said in a statement.

Friends of Refugees From Eastern Europe, a Jewish group, immediately appealed that decision to the Land and Environment Court. The protective design, the group said, was not a commentary on the risk the temple faced, but rather a best practice used at lots of synagogues. It also offered to do a redesign.

But the court sided with the council. In its decision, the court explained that western countries are under threat from Daesh, also known as ISIS or ISIL, and that the potential of an attack in Australia is considered “probable” by government officials. The court also noted that the designs would serve only to protect those inside the building, not those outside.

The announcement comes just days after Australian authorities foiled a major terror plot to blow up an airplane using a homemade explosive device and to release poison gas. But it may reflect something uglier too.

Although there are about 120,000 Jews in Australia, including 50,000 in the Sydney area, an undercurrent of anti-Semitism runs through the country. Attacks on Jews and Jewish property jumped 10 per cent in 2016; Jewish community groups logged a total of 210 incidents. That included physical assaults and harassment, along with vandalism and graffiti. In one instance, a 22-year-old was punched in the neck and called an expletive as he walked home from synagogue. In another, onlookers threw eggs at Jews as they walked home from Friday night services.

Holocaust-denial pamphlets were distributed at several universities, along with neo-Nazi brochures calling for the killing of all Jews. Two vehicles were firebombed, the glass door of a synagogue was broken, and graffiti artists covered the walls of a synagogue with messages like “f---ing Jew” and “die Jeue.”

As the Executive Council of Australian Jewry explained:

“Although Australia remains a stable, vibrant and tolerant democracy, where Jews face no official discrimination and are free to observe their faith and traditions, anti-Semitism persists. There are segments of Australian society which are not only hostile towards Jews, but actively and publicly express that hatred with words and threatened or actual violent acts. As a result, and by necessity, physical security remains a prime concern for the Jewish community.”

Jewish leaders have protested the synagogue decision vociferously, arguing that it stifles their freedom of speech and rewards terrorism.

“The decision is unprecedented,” Rabbi Yehoram Ulman told news.com.au. “Its implications are enormous. It basically implies that no Jewish organization should be allowed to exist in residential areas. It stands to stifle Jewish existence and activity in Sydney and indeed, by creating a precedent, the whole of Australia, and by extension rewarding terrorism.”

“They have effectively placed in jeopardy the future of Jewish life in Australia,” he said.