By Ari Rabinovitch
JERUSALEM (Reuters) - Israel said on Sunday its new Iron Dome interceptor had successfully protected two major cities from Palestinian rockets in the past few days, and other countries were already expressing interest.
The long-anticipated shield was deployed last Sunday outside the Gaza Strip -- days before the latest flare-up of fighting between Israel and Palestinian militants -- and has achieved a perfect record, shooting down at least eight rockets in mid-air, officials said.
The country's leaders said the system, by blocking direct hits on urban centers, had given Israel some extra room to maneuver and may have prevented a further escalation.
But smaller towns closer to the border remain exposed to shorter-range fire and have been repeatedly hit. And Israel has struck hard with a series of air and ground strikes in Gaza. Both sides signaled on Sunday they were looking to end the flare-up.
"Israel marked a significant and impressive achievement with the Iron Dome system intercepting missiles," said Prime Minister Benjamin Netanyahu at the start of a weekly cabinet meeting. "This has echoed throughout the world, including in European countries where I have visited."
His defense minister, Ehud Barak, said the system's success "has deeply impacted Israel's ability to act operationally and to maneuver diplomatically against challenges, not just routinely, but also during much broader events."
Produced by state-owned Rafael Advanced Defense Systems Ltd., Iron Dome uses small radar-guided missiles to blow up Katyusha-style rockets with ranges of between 5 km (3 miles) and 70 km (45 miles), as well as mortar bombs, in mid-air.
Its development was spurred by the 2006 conflict in Lebanon with Hezbollah and the Gaza Strip war against Hamas in 2008-9, when those Israeli towns within range were all but defenseless against the rockets.
At least 120 rockets have been fired at southern Israel in the latest round of fighting, causing damage but no injuries. The two Iron Dome batteries, deployed near the cities of Ashkelon and Beersheba, are meant to shoot down only those rockets that will strike in designated areas.
The system calculates the trajectory of each projectile and ignores rockets that will land in non-populated areas.
Ofir Shoham, head of weapons development in the Defense Ministry, said the units had not missed a single rocket within their parameters, preventing "significant damage."
Israel is looking to deploy four more batteries at a cost of $200 million within a year and a half, Shoham told Army Radio.
"We want to move forward with that purchase, we hope there will also be some U.S. assistance to make it easier, but we don't want to wait," he said.
Other countries were also looking into buying the Iron Dome, he said. "There is interest. There is no other system like it in the world. But we are not yet in a position for mass marketing."
The Obama administration had secured $205 million to help Israel with production and deployment of Iron Dome, but it has been held up. Israeli President Shimon Peres, who recently visited the United States, urged the Americans to free up the cash, an aide said.
Israel envisages Iron Dome becoming the lowest level of a multi-tier aerial shield capped by Arrow, a partly U.S.-funded system which shoots down ballistic missiles above the atmosphere.
But with each interceptor firing estimated to run at between $25,000 and $40,000, pitted against estimated costs of cruder Palestinian rockets as low as $500, there has been criticism the system could bleed the defense budget. Barak dismissed the argument and said Israel would deal with the costs.
(Additional reporting by Dan Williams, editing by Mark Trevelyan)