JAVA_HOME is not being detected

Hi,
My builds fail everytime, even though I have set JAVA_HOME to the right 
directory. I'm running ant-1.6.5, jdk1.5.0_05, anthill-1.8.0.264, 
tomcat-5.0.28 on Suse10. It fails even when I use the ant1.6.2 that 
comes with anthill.

 From my server logs I can see that :

The code is checked out properly. The version file is being updated and 
checked into the repository. The problem begins when ant is called. 

com.urbancode.anthill.BuildManager  - Execute:Java13CommandLauncher: 
Executing  '/usr/local/......................'
.
.  {long list of environment variables}
.
PAGER=less
LD_HWCAP_MASK=0x20000000
XDG_CONFIG_DIRS=/usr/local/etc/xdg/:/et
ANT_HOME=/usr/local/anthill/anthill-1.8.0.264-src/lib/ant1.6.2
Error: JAVA_HOME is not defined correctly.
We cannot execute java
 [Thread - AnthillBuildDaemon] ERROR com.urbancode.anthill.BuildManager  
- Failed to Build project. Error: 1
java.lang.Exception: Failed to Build project. Error: 1
    at 
com.urbancode.anthill.BuildManager.buildProject(BuildManager.java:523)
    at com.urbancode.anthill.BuildManager.runBuild(BuildManager.java:401)
    at com.urbancode.anthill.BuildManager.build(BuildManager.java:185)
    at 
com.urbancode.anthill.AnthillProject.releaseProject(AnthillProject.java:231)
    at com.urbancode.anthill.BuildDefinition.run(BuildDefinition.java:158)
    at com.urbancode.anthill.BuildDaemon.run(BuildDaemon.java:73)
19:38:12:229 [Thread - AnthillBuildDaemon] INFO  
com.urbancode.anthill.BuildManager  - Step 6) Tag project (if set to 
success):
19:38:12:229 [Thread - AnthillBuildDaemon] INFO  
com.urbancode.anthill.BuildManager  - Step 7) Publish Project:
19:38:12:230 [Thread - AnthillBuildDaemon] INFO  
com.urbancode.anthill.adapter.SubversionRepositoryAdapter  - Get 
revisions since command:

I have most definitely set JAVA_HOME and PATH correctly. (in 
/etc/profile.local : export JAVA_HOME=/usr/local/java/jdk1.5.0_05.  
echo, tomcat are all able to read it)
echo statements in the ant script file showed that ant was getting 
neither JAVA_HOME nor 'which java'. I defined JAVA_HOME in the ant 
script file and then it started working.

Help, folks!

Regards,
Roshan Nair.