Thank you all for your comments. very helpful.
For the one who asked- i dont want to provide any information that i shouldn't about my sponsoring professor, but the project is conducted in Ben Gurion university- Israel (electrical engineering department).
Rules may very well be different in Israel, I'm not familiar with them. I am, however very well versed in the FCC rules in the USA, as well as being a telecommunications engineer at a University. I'd be surprised if the rules were vastly different...
Being a university sponsored research project does not automatically exempt you from the rules. I've been through this many times at work, and while many will attempt this argument, it will never hold up in court.
The right way to do this is to use a radio service that is covered under "license by rule" or similar. I'd recommend looking at BlueTooth or WiFi as an option. Trying to compete with high power cellular base transceivers is going to be problematic. Most systems use TDMA or IP, so narrowing down which signal belongs to which cellular device while dealing with the high level of background noise is going to be difficult.
Using a lower powered radio is going to give you better results. Avalanche beacons used in the snow use low power signals. It's much easier to DF a low power signal than it is a high powered one. Dealing with reflections, multipath, etc. complicates things. A low power BlueTooth or WiFi signal is going to be easier, require less power than cellular, and use less battery power (might be important for long term tracking). It also makes it easier to deal with the possible licensing issues.
Most people have WiFi or BlueTooth constantly turned on. Being able to track the MAC address of the WiFi radio might be easier, but trying to trick a radio to listen to only one MAC address is going to take some work. BlueTooth works the same way. The cellular phone will be broadcasting some sort of beacon looking for a connection. It'll be ID'd.
Probably talking to the bluetooth radio and getting it to ping would be easier.
Even better if you could develop an application that would be able to recognize your system and send back last known good GPS position or some sort of triangulation using cellular towers or WiFi hotspots. Might get you within a few meters or so.
Most cellular carriers can ping a cell phone and have it send it's GPS coordinates. So some of this might be already solved. GPS coordinates on their own can be off by 10 meters or so. So, having your project be able to pinpoint the position might be better.
Since you are dealing with a single device, you'll either need some sort of Signal Arrival Delay system that will find the location and/or simple direction finding using a directional antenna. Nice thing is that 2.4 and 5.8 WiFi frequencies use small antennas. Bluetooth is going to be a bit harder since it uses frequency hopping spread spectrum, so getting your receiver to track that is going to be difficult.
Sounds like an interesting product and something very useful. I'd love to hear more about this. I'm sure there would be a market for this if you could make it carrier/vendor agnostic and not require any sort of downloaded application for it to work.