When a error is 500, that means it's an internal error, meaning internal to the service - the service threw an exception that was not caught.
Look in the Windows event logs
on the server to see what went wrong.
- Go to menu Tools/Internet Options in your IE.
- Click on the Advanced tab, uncheck
"Show friendly HTTP error messages" option and click Ok.
- Try accessing your web page again. Now you will see much more meaningful error message which will help you to troubleshoot the problem.
Other few possibilities:
There might be an issue in the way you have hosted your service. May be multiple config files?
Further, since you have not shared the type of webservice or what framework application it is, it can also be a cross domain policy issue after hosting on other server.
See details here: Microsoft Support: Error message when you visit a Web site that is hosted on IIS 7.0: "HTTP Error 500.0 – Internal Server Error"