The study aims to evaluate the safety and clinical effect of daily oral treatment of Laquinimod capsules in active moderate to severe Crohn's disease. This study will assess Laquinimod doses of 0.5mg /day to 2 mg/day in sequential dose groups (cohorts). Laquinimod is a novel immunomodulating drug which is currently in advanced stages of development by Teva Pharmaceuticals Ltd. for Multiple Sclerosis.

Inclusion Criteria:

1. Subjects diagnosed with Crohn's disease for at least 3 months prior to screening.
2. Moderate to severe Crohn's disease patients as determined by the CDAI score

Exclusion Criteria:

1. Subjects who have had recent bowel surgery
2. Subjects with clinically significant GI obstructive symptoms
3. Subjects with a clinically significant or unstable medical or surgical condition
4. Subjects with unstable doses of standard of care medications (5-ASA, antibiotics, oral corticosteroids, immunosuppressants )
5. Women who are pregnant or nursing or who intend to be during the study period.
6. Women of child-bearing potential who do not practice an acceptable method of birth control