Service Development Help : Using the Local Service Development Feature : Supported Elements
Supported Elements
The local service development feature works with all of the packages and IS elements displayed in the Package Navigator view, as well as package contents that are not visible in the Package Navigator view, such as supporting files associated with the folder or element.
Note:  
The local service development feature works with the local development server only. The feature does not work with packages in other servers listed in the Package Navigator view.
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