SYDNEY, Australia — Jewish leaders in Australia’s biggest city have reacted with dismay after a court rejected their application to build a new synagogue on the grounds that it could become a terrorist target.

The temple was destined for a piece of land just a short walk from Sydney’s iconic Bondi Beach but nearby residents complained that its presence might draw a terror attack. Inspectors from Waverly Council, which was tasked with the initial approval process, agreed. They pointed to the synagogue’s own design, which included setback buildings and blast walls, as evidence that an attack could be anticipated.

Waverley Council had previously refused the development application for reasons including that the site was “unsuitable for a synagogue because of the potential risk to users and other members of the general public.”

They also said the design would have an “unacceptable impact” on the street and neighborhood.

The Friends of Refugees of Eastern Europe (FREE) group lodged the application. FREE spokesman Rabbi Yehoram Ulman told News Local that the application’s refusal by the NSW Land and Environment Court, based on the above security risk assessment, came as a shock to the Jewish community.

“The decision is unprecedented. Its implications are enormous,” he said in a statement. “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.”

Waverly Council issued a public statement of its own and said FREE was entitled to lodge another application to develop the site at any time in the future.