The US and Israel have signed an agreement to upgrade the Arrow II ballistic shield, according to the Israeli Defense Ministry.
The Arrow III will allow Israel to deal with the threat of long-range ballistic missiles and will give it the ability to shoot down weapons of mass destruction outside the atmosphere," the ministry said.
Arrow III will join the Iron Dome and Magic Wand systems in providing multilevel defence for the threats confronted by the state.
The defence system will be jointly produced by Israel Aerospace Industries and Boeing.
The project will take more than four years to complete, depending on the resources made available for the project.