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"What would Jesus do?" That's what many people in Boulder, Colo., are asking after a Catholic elementary school in the city expelled two children because their parents are lesbians.

The conflict in the Roman Catholic Church over homosexuality has come to loggerheads in the community, with the church standing by its belief that marriage is a pact between a man and a woman while opponents accuse it of failing to live up to Jesus’ mission of love and acceptance.

Sacred Heart of Jesus Church says it told the lesbian couple that their older child would be allowed to complete enrollment in kindergarten this year but would not be allowed to attend first grade in the fall. Their younger child will be allowed to finish preschool but can't enter kindergarten.

The Archdiocese of Denver defended the decision.

"To preserve the mission of our schools, and to respect the faith of wider Catholic community, we expect all families who enroll students to live in accords with Catholic teaching," it said.

That didn't sit well with Boulder Pride, a local gay rights group that has organized a petition drive and town hall meetings, saying the church's decision has caused a lot of sadness, anger, frustration and confusion.

"The reason that it's such a firestorm here is that we are a small town that has a big reputation, and it's a very special community," said Amy Zuckerman, a Boulder Pride board member. "And this really kind of goes against the values of the town, if you will. We don't like to see prejudice and discrimination. It's about what's best for the community."

Archbishop Charles Chaput said the decision was about what's best for the couple's children.

"To allow children in these circumstances to continue in our school would be a cause of confusion for the student, in that what they are being taught in school conflicts with what they experience in the home," he wrote on the church Web site.

Some critics of the church point out that it allows children of divorced parents and children born out of wedlock to attend the school -- even though both situations are sins in Catholic teachings.

But Sacred Heart's priest, the Rev. William Breslin, said in his blog that the situations were different: "It's simply that the lesbian couple is saying that their relationship is a good one that should be accepted by everyone; and the Church cannot agree to that," Breslin wrote. "People who are divorced do not say divorce is good. There are no pro-divorce parades. Divorce is a tragedy for everybody."

The children's parents have not spoken publicly, but the school's decision was leaked to local media by teachers at Sacred Heart who disagree with it.

Michael Voris from RealCatholicTV.com said the fact that school teachers were the whistleblowers brings to light the culture wars raging inside the church. "This is about Catholic Identity and building boundaries, which all groups do," he said.

But many opponents of the church's decision said they found it hard to reconcile the school's doctrinal boundaries with these words it features in a video tour on its Web site: "Let the children come to me ... for the kingdon of heaven belongs to such as these." Matthew 19:14

"I just feel the Catholic Church is a church that should be teaching acceptance and tolerance," Juli Aderman-Hagerty told 7NEWS recently after attending Mass at Sacred Heart of Jesus Church. "I just don’t think this is an example of that."

The Archdiocese says it has no plans to change its position. Meanwhile, Boulder Pride is organizing a community forum to take place Monday, to decide how to go forward.