It can be that java 1.7 is not installed in your system then you can use java version that is already installed in your system.
Following Steps could resolve this error by setting up current version in project facet
Step 1: Right Click over your Project on Project Explorer and click on Properties.
Step 2: Goto java build path->Libraries
Check JRE System Library Jars and also check it is JDK 1.6 or 1.7
Step 3:Go to "Project Facet" and select your current java version available.
click apply then ok