Israel’s top two government-owned aerospace firms are competing to design and demonstrate a new missile to intercept short-range ballistic missiles, which officials here call a growing threat to Israeli and even U.S. forces deployed in the region.

Israel Aircraft Industries and Rafael both received 18-month study grants earlier this year from the Israel Missile Defense Office (IMDO). Ministry of Defense officials hope their efforts will evolve into the first phase of a $300 million, four- to five-year, full-scale joint development program with the United States.

If the Pentagon accepts Israeli proposals to cooperate, one firm would be picked to work with the Pentagon’s Missile Defense Agency (MDA) and possibly U.S. industry.

“In Israel, we have a defined requirement to come up with a cost-effective solution to defend against the low-end class of threats coming from Lebanon and Syria. And after extensive discussions with MDA, we understand that U.S. forces have similar requirements,” said IMDO Director Arieh Herzog.

The two countries cooperated on the Arrow interceptor, built to bring down Scud and Shihab ballistic missiles. Herzog said the new missile defense effort is aimed at destroying rockets and missiles of shorter range but possibly greater lethality.

He said the embryonic program would counter “anything from the Iranian Fajr and the Russian Frog to missiles just below the Scud, so we’re talking about intercepting threats with ranges from about 40 kilometers to about 200 kilometers.”

Growing Threat

Because such rockets and missiles are cheap, plentiful, easily concealed, simple to launch and largely exempt from international arms control accords, officials here say they are becoming the ideal terrorist or insurgent weapon.

More worrisome, according to Uzi Rubin, a former IMDO director who for years has been warning officials here of the threat, short-range ballistic missiles are becoming increasingly accurate and can be fired in rapid-salvo fashion like classic artillery rockets, at rates of 20 rounds per minute.

When equipped with chemical or non conventional warheads, their massive firepower can be even more devastating than Scud-type missiles, which are launched singly and require at least one hour between launches, he said.

“The … threat is proliferating throughout our region at a much faster pace than the classic, ‘higher-end’ ballistic missile threats.

“They can be purchased very cheaply, and the technology is widely available to transform these marginally significant battlefield irritants into truly deadly, strategic threats,” Rubin said.

Israeli experts here cited North Korea’s May 1 test of an upgraded Russian-origin Frog-7 as the latest example of how the crude, 1970s-era, tube-launched missile can be transformed into a precise, extended-range delivery system using better propulsion and navigation components.

According to May 9 editions of the Middle East Newsl ine, Pyongyang plans to market its upgraded Frog-7 to militaries throughout the region. The new, vehicle-mounted Frog variant nearly triples the range from 70 kilometers to just under 200 kilometers, the Montreal-based Internet service said, citing Western intelligence officials.

Herzog said existing interceptors such as the Arrow and the U.S. Patriot PAC-3 are “not capable enough … and way too expensive” to defend against such threats, although critical elements of the Arrow’s battle management system could be adapted to fight short-range missiles.

In parallel, Israel’s Elta Systems, a subsidiary of Israel Aircraft Industries, is developing a new S-band multi mission radar intended to provide fire control for the planned interceptors, industry sources here said.

Seeking Help

Herzog noted that Israel is proceeding unilaterally with only the most modest aspects of its study effort . The IMDO director said that once the initial 18-month study phase is complete, he hopes to coordinate future work with the MDA.

“Right now, our effort can be described as a very serious study. There has been no decision yet to go for full research and development.

“For that, we will need a U.S. budgetary contribution,” Herzog said.

He said Israel has asked MDA to support a congressional appropriation for the effort as part of Washington’s annual contribution to the ongoing Arrow System Improvement Program.

For two years, the U.S. Congress has appropriated about $150 million for upgrades, testing and U.S.-based co-production of the joint U.S.-Israeli Arrow interceptor.

In 2006, Herzog said, he hopes to receive a similar amount from Washington, of which less than $20 million would be earmarked for the new effort.

“Of course, everything depends on congressional funding approvals, but we believe that for less than $20 million, we can accomplish all the objectives we’ve established for our 18-month study program,” Herzog said. “The MDA director has agreed there is a common interest to study what can be done in order to intercept these threats.”

The MDA released a statement saying the agency’s planners and technology developers have long recognized the threat of short-range ballistic missiles.

“We have a long history of cooperative efforts with Israel, on a wide variety of missile defense activities, and we will continue to work together to provide effective defenses against current and future threats,” the statement said.

Rockets and missiles to be targeted by the proposed Israeli-U.S. program include the latest Iranian-made missiles, such as the 200-kilometer-range Zelzal, the 150-kilometer-range Nazeat and versions of the Fajr series of missiles deployed by Hezbollah in southern Lebanon.

The new system would tackle Syrian Frog variants, Syrian-manufactured 220 millimeter rockets, the Russian Smerch multiple launch rocket system and any remnants from Iraq’s presumably destroyed arsenal of 90-kilometer al-Sam oud and 200-kilometer Ababil, or al-Fatah, missiles.

Earlier this year, Maj. Gen. Beni Gantz, commander of Israel’s Northern Command, said Damascus had equipped Hezbollah forces in Lebanon with indigenously produced rockets, with a range he estimated at some 75 kilometers.