The Israeli Defence Ministry will sponsor the development of seven Iron Dome missile defence batteries, capable of intercepting barrages of Kassam and Katyusha rockets, over the next two years.
The ministry has already formed a new battalion to operate the system, which will be part of the Israeli Air Force's air defense division, according to jpost.com.
The seven batteries will be manufactured by Rafael Advanced Defense Systems at an estimated cost of nearly $250m, which will also include the cost of developing interceptors.
The Iron Dome will use an advanced radar to locate and track incoming rockets and then use a kinetic missile interceptor to intercept them.
On 6 January 2010, the Iron Dome successfully completed round of tests in preparation for the development stage of the system.
The ministry will deploy the first four Iron Dome systems along the Gaza border by mid 2010.