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We have investigated the out-of-plane propagation of light in two-dimensional photonic band-gap crystals consisting of long dielectric nanorods. Defects, which sufficiently break the crystal symmetry, can produce photonic states localized at the defect sites. We show that this localization can result in a sharp transition between the state of the out-of-plane light propagation through the entire photonic crystal, and the state in which light propagates only along the defect channels. This switching can be induced by slight changes of the dielectric constant at the defect sites. We propose a practical way of achieving this, and suggest applications. © 2004 American Institute of Physics.