20060711020469I

(-23) A flight instructor and a private pilot enrolled in a commercial pilot training course were practicing landings. The air traffic control tower operator told them to report mid-field downwind each time. After approximately the seventh landing. The instructor decided to practice an engine out landing, and at the downwind leg of the traffic pattern, the instructor reduced the power to simulate an engine failure. The intention was to extend the landing gear on final approach, however, on the turn from the base leg to final they heard the tower issue a clearance to land to a Gulfstream aircraft. They saw the aircraft on approximately one mile final and decided to execute a left 180 degree turn and reenter the downwind. They called the tower and said that they were extending the downwind to sequence behind the Gulfstream aircraft on final. The tower acknowledged and told them that they were cleared for the option. Both the instructor and the commercial student failed to ensure that the landing gear was extended and landed gear up. The landing gear warning horn was sounding for the entire time while the throttle was retarded. The propeller and the underside of the aircraft was damaged. There were no injuries.