We have answered this question several time and bottom line is that you should take the test as it covers both requirement and the requirements are that you demonstrate knowledge of life in the United Kingdom as well as language ability. In your case you do demonstrate Language Ability but not Life in the UK.  Another thing that I have seen is that the requirement is Level 3 of ESOL and you have only 2.  I will paste the link below and you can check yourself but I think you should take the test, it is the best option. At least that is what my understanding is. Someone, please correct me if I am wrong.

http://www.ind.homeoffice.gov.uk/applying/nationality/knowledgeoflifeintheuk

Knowledge of life in the UK
Changes with effect from 1 November 2005 - the need to demonstrate knowledge of life in the United Kingdom as well as language ability

Guidance

Please make sure that you have read the correct guidance notes on the requirements for applying for naturalisation.

If you are applying for naturalisation on or after 1 November 2005 you will need to prove knowledge of life in the UK as well as your English language ability. There will be two ways in which you can do this:

If you are already at or above ESOL (English for Speakers of other languages) Entry 3 standard of English you will be able to undertake a specially developed short test called "Life in the UK Test".

Or

If you have not reached ESOL Entry 3 you will need to gain an approved English for Speakers of Other Languages (ESOL) qualification through attending an ESOL course which includes citizenship materials at a local college.

Details of the two ways in which you can meet the language and knowledge requirements for the purposes of naturalisation are set out below.

If you are not sure what your level of language ability is, you should work through the tutorial on the Life in the UK Test website www.lifeintheuktest.gov.uk. If you are unable to fully understand the information then it is likely you will need to enrol on an ESOL with citizenship course.

As far as I can see, you do NOT have to sit the test as an ESOL qualification gained on a citizenship course is sufficient.

The only thing I am unsure about is how the ESOL grading works. Is level 1 the highest or the lowest? Will you need to move up to level 3?

Ask at the college  where you got it if it  is sufficient, they would know.

ESOL with citizenship content courses.

If you are not yet at ESOL Entry 3 you will be able to meet the new requirements by successfully completing new language courses involving learning materials which incorporate information about citizenship. These materials are intended to enable you to gain sufficient knowledge of the UK at the same time as developing your knowledge of the English language. In order to meet the requirements for naturalisation you will need to show that you have successfully progressed from one ESOL level to the next.

 On the link that Waheed provided you, scroll down to 2.1 and read or just read it here.

2.1 What is ESOL?

It means English for Speakers of Other Languages. The courses are concerned with the teaching of English to speakers of other languages who wish to live and work in the UK. Successfully gaining an ESOL qualification in speaking and listening through attending a course with both language and citizenship elements will mean you have met the language and knowledge of life in the UK requirements for naturalisation at the same time.

Double check you did a course recognised by the Home Office

2.8 Will you accept certificates from any college?

Certificates are issued by recognised awarding bodies, and not by colleges themselves. From 1 November 2005, we will only accept ESOL Skills for Life certificates (or in Scotland 2 ESOL Units at Access Level under the Scottish Credit and Qualifications Framework approved by the Scottish Qualification Authority) that have been obtained by attendance at a public sector (Further Education, Adult or Community) college. This is because at present, very few, if any, private sector colleges are offering ESOL courses.

It is possible that in the future, private sector colleges will begin to offer, at an applicant's own expense, ESOL Skills for Life courses or their Scottish equivalent that are suitable for those applying for naturalisation. If you decide that you would prefer to use such a college, we would encourage you to choose one that is accredited under the "English UK" scheme. This is for your own protection, as it guarantees you a good standard of tuition at a fair price by qualified teachers. The Home Office may not accept certificates that have been obtained through attendance at a non-accredited college.

The level 1 which i've got is the highest ,and I had a separate course about life in the uk

The cours run by park lane college leeds 2003-2004 for 10 weeks(50 hours)

 and given certificate from college which says the cours cover thise topics:

1-British socity, principles and values

2-Housing

3-education

4-Employment

5-Health

6-Volunteering

7-Government

8-Accessing local services

9-Intergrating and contributing to british society

(In partnership whit refugee action, refugee council,YHRVSP,British red cross andNRC.funded by home office refugee integration challenge fund)

I would like to know if i should sit for citizenship test or not becouse this course cover all subjects incitizenship book and farther than that.

You may have noticed that Waheed Malik took the trouble to post a link earlier. If you follow it, and read the whole of the page it goes to, you will see that your question is answered:
"Certificates are issued by recognised
awarding bodies, and not by colleges themselves. From 1 November 2005,
we will only accept ESOL Skills for Life certificates (or in Scotland 2
ESOL Units at Access Level under the Scottish Credit and Qualifications
Framework approved by the Scottish Qualification Authority) that have
been obtained by attendance at a public sector (Further Education,
Adult or Community) college..."

If your certificate is an ESOL Skills for Life certificate, it will be acceptable. If it isn't, it won't.

Many thanks for your help on this matter.I"ll seat for the test.

I got a certificate from college which certify i successfully completed the citizenship course (NOV 2003).I've got level 2 ESOL.

I would like to know if i shold take exam or not?who i should contact to aske?!