Unable to locate tools.jar

I had similar issue and got solved by doing following ,

1) set JAVA_HOME as C:\Program Files (x86)\Java\jdk1.7.0\

2) ANT_HOME as F:\ant\apache-ant-1.8.4-bin\apache-ant-1.8.4

3) add both to 'path ' in system variables

A JRE doesn't have a tools.jar, you need a JDK. Set your JAVA_HOME and PATH variables so that they point to a JDK, not a JRE.