You can try using JDK 1.6. When the WebLogic 10 server was released, JDK 1.7 was not. Perhaps running the WebLogic script does not recognize your environment, and suppose you have a jrockit environment. Using JDK 1.6 should solve your problem.
UPD If you insist on using JDK 1.7, I suggest that you try to locate the problem in the run / setEnv server scripts and edit them to avoid the jrockit option.
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