If you look at the TCP/IP model SOAP is in the application layer for a SOAP web service. Note though that it uses another protocol in the application layer, HTTP, as its transport. TCP is in the transport layer which HTTP uses for its transport. IP is in the internet layer. The network interface layer is below the internet layer.
[ December 14, 2008: Message edited by: Peer Reynders ]
SOAP is simply a communication mechanism. It is a networking protocol above HTTP, but still part of networking layer. An application layer would consist of the actual services and applications communicating.
XYZ application <---> SOAP-based web service 1 <---> ABC application
The XYZ and ABC applications are on an application layer.
The web service is on a network layer because it enables the communications between the applications using a HTTP-based network.
TCP/IP, HTTP, SOAP are all part of the network layer. SOAP messages are the representation of the network layer for some or all aspects of an applications. It depends on what the application does and the features it supports. [ December 15, 2008: Message edited by: James Clark ]