By Dan Levine

SAN FRANCISCO (Reuters) - A U.S. judge on Thursday said Airbnb and the city of San Francisco must work harder to resolve a court case over an ordinance forbidding the home-rental company from taking bookings from hosts who have not registered their homes.

U.S. District Judge James Donato in San Francisco said he would issue an order prohibiting the city from enforcing the ordinance, to give both sides more time to work on a fair way to enforce the local law.

"You are going to try harder to work this out," Donato said. "This can be solved."

The San Francisco ordinance, enacted in August, makes it illegal for Airbnb to collect fees for providing booking services for rentals that had not been properly registered with the city. Airbnb makes money by charging a service fee on bookings.

Airbnb contended that the ordinance violated a broad federal law that protects internet companies from liability for content posted on their platforms.

Donato rejected that argument earlier this month, but said he had concerns over how San Francisco would enforce the ordinance fairly.

In court on Thursday, deputy city attorney Sara Eisenberg said Airbnb could simply require hosts to upload their registration forms before processing a booking. That would absolve the company of any liability under the ordinance, she said.

Eisenberg said the city planned to begin enforcing the ordinance. In response, Donato said he would issue an order prohibiting the city from doing that now.

"I am disappointed in both sides that more has not been done," the judge said.

Airbnb said it would rather appeal Donato's ruling now, instead of working on enforcement issues. But Donato said he would rather both sides address it now.

"I know you want to appeal. This is a solvable problem," he said.

Airbnb, which provides a website to connect hosts with short-term renters, had invoked Section 230 of the U.S. Communications Decency Act, a 20-year-old statute designed to protect free speech online, to sue San Francisco and two other California cities.

Without the protection of Section 230, Airbnb could be much more vulnerable to local efforts to introduce tougher laws aimed at limiting Airbnb's impact on housing stock and rent prices.