TEL AVIV, Israel — Defense planners here are struggling to squeeze maximum capability from a minimalist space budget by shifting their sights to subsystems and enabling technologies rather than stand-alone satellites.

With annual military space funds flat-lined at about $100 million, Israel’s Ministry of Defense (MoD) can barely sustain even one new satellite start every two to three years, government and industry sources here say.

And given surging demand for bandwidth, all types of remote sensing imagery, and more efficient means of delivering and protecting space-based assets, MoD is embracing a new strategy that renders it an incubator of sorts for capabilities whose spinoff applications fuel commercialization of Israel’s space industry.

“We’re working to improve everything across the entire spectrum,” said retired Brig. Gen. Chaim Eshed, MoD’s longtime director for space programs. “To do this, we can’t follow the small, incremental process of years past. Instead, we need to do something dramatic.”

In an interview in January, Eshed cited the U.S. Defense Advanced Research Projects Agency (DARPA) program for fractionated space as a model for meeting future requirements through private sector collaboration. “We need to team up to create joint ventures that focus on capabilities that answer our surging needs and secure our future in space.”

He said MoD has already begun work to improve imaging resolutions, targeting accuracies, ground exploitation capabilities and entirely new payloads, including a self-protecting electronic intelligence payload designed to intercept signals as they travel through space.

“Our goals are similar to those of the [DARPA] F6 program. We want to have all the building blocks in place so that down the road, we have common, very small plug-and-play clusters that not only are connected to one another, but interconnected into our overall network,” Eshed said.

He declined to define specific building blocks now in development or say whether or not Israel aimed to work with DARPA or develop its own, much more modest version of the so-called F6 — Future, Fast, Flexible Fractionated, Free-Flying — program. According to DARPA’s website, the program aims to replace “a traditionally large monolithic satellite … with a group of smaller, individually launched, wirelessly networked and cluster flown spacecraft modules.”

At an international space conference in Herzliya, Israel, Jan. 30-31, retired Maj. Gen. Isaac Ben-Israel, chairman of the Israel Space Agency (ISA), said the increasingly dual-use nature of space allows for more intimate collaboration among government, academia and industry toward respective yet synergistic goals. And while there will always be certain technologies reserved only for the security sphere, investment in critical capabilities can be leveraged to the mutual benefit of Israel’s defense, civil and commercial sectors, he said.

Ben-Israel, a former Knesset member who also serves as chairman of Israel’s Research and Development Council, is leading efforts to establish a government-funded, properly staffed space agency to define, plan and administer national space strategy. The effort still awaits a multiyear funding commitment by Israel’s treasury.

When the national program is in place, it will free MoD to pursue “critical, out of the box developments” that not only support security requirements but offer commercial and civil benefits for Israel’s entire industrial base, Eshed said.

As an example, he cited special materials that promise to drive down satellite weight by orders of magnitude in support of communications as well as remote sensing applications. Similarly, he cited communications, propulsion and ground exploitation capabilities as critical in support of a whole new gamut of multimission satellites, from 100-kilogram microsatellites all the way down to 10-gram satellites.

Meanwhile, Eshed said MoD would continue to initiate new satellite builds, irrespective of the growing focus on subsystems, materials and enabling technologies. MoD launched its newest spy satellite, Ofeq-9, in June 2010, and the high-resolution imager now works in a constellation of sorts with Israel’s other operational systems, Ofeq-5 and Ofeq-7.

Additionally, the MoD-funded TecSAR satellite, launched in 2008, supports multiple government agencies with high-resolution synthetic aperture radar images. Other satellites supporting MoD customers are the commercially operated Eros series of remote sensing spacecraft and the Amos line of communications satellites.

MoD has two new satellites on order, a follow-on TecSAR and the Ofeq-10, neither of which is planned to be launched this year, government and industry experts here said. In interviews since early February, space experts here said the TecSAR most likely would launch prior to Ofeq-10, but not until late 2012.

Eshed refused to discuss launch schedules, but confirmed that the Ofeq-5, operational since May 2002, is still performing imaging missions. “That satellite is in its ninth year. Like all of our satellites built by [Israel Aerospace Industries] IAI, it far exceeded is advertised lifespan,” he said.

In an interview last year, Yehiel Shalev, head of the military satellite department at IAI’s MBT Space Division, said the design goal for Ofeq-5 was less than six years. “Our satellites have a history of surprising us with extended mission life, but a lot depends on the energy of the sun.”

While IAI’s craftsmanship is a factor, Eshed, too, attributed Ofeq-5’s extended life-span to the current cycle of reduced solar activity. “We’re all benefiting from the current cycle, not only by the endurance windfall, but by the extra breathing room we have to prepare replacement satellites,” he said.