[Rails] Ajax observe_field not vorking on Rails

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I am trying to create some kind of search in my ruby on rails
application and I want to add ajax support. I want when a user types in
a search box a word, ajax automatically generates the results. And I
have searched almost all internet and I couldn't find answer to
following question:

When I type into my text area nothing happens. It is like ajax is not
working at all. Tre problem is in observe_field which should observe my
id= 'query' but it seem like it not doing anything

I am using Prototype 1.6.1 and the newest version of rails. The code I
wrote is:

viewer:

<form name="sform" action="" style="display:inline;">
<label for="item_name">Filter on Property No : </label>
<%= text_field_tag(:query, params['query'], :size => 10, :id => 'query'
) %>
</form>

<%= image_tag("/images/system/blue_small.gif",
:align => "absmiddle",
:border => 0,
:id => "spinner",
:style =>"display: none;" ) %>
</p>

<%= observe_field 'query', :frequency => 1,
:update => 'table',
:before => "$('#spinner').show()",
:success => "$('#spinner').hide()",
:url => {:action => 'list'},
:with => 'query' %>

<div id="table">
<%= render :partial => "items_list" %>
</div>

And my controler is:

def list

sort = case params['sort']
when "Title" then "title"
when "address" then "address"
when "close date" then "close_date"
when "property_no_reverse" then "property_no DESC"
when "address_reverse" then "address DESC"
when "close_date_reverse" then "close_date DESC"
end

conditions = ["title LIKE ?", "%#{params[:query]}%"] unless
params[:query].nil?

@total = Message.count(:conditions => conditions)
@accounts = Message.paginate :page => params[:page], :per_page =>
10, :order => sort, :conditions => conditions
if request.xml_http_request?
render :partial => "items_list", :layout => false
end

end

I would greatly appreciate any help I can get!
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