Currently, minecraft.net is down. When minecraft.net is down you can still play single player, but multiplayer won't work. You can connect to a server, but login will fail with a 503 errror.
To temporarily fix the problem in v1.3, edit the server.properties file stored in the same directory as the server jar/exe. Change online-mode=true to online-mode=false to disable account authorization. Save the file. Restart the server and you'll be able to connect without a 503 error.