The Defense Ministry and Israel Aerospace Industries are so confident the Arrow 3 anti-ballistic missile system will be able to destroy hostile missiles in space, they're reported to be planning to start production even before flight testing has been completed.

And that includes the critical test of actually intercepting a target missile that will simulate an incoming Iranian Shehab 3b ballistic weapon, which Israel views as its main missile threat at the moment.

The Israeli business daily Globes reported Arrow 3, being developed by state-owned IAI and the U.S. Boeing Co., is scheduled to undergo that test sometime in the next few weeks.

Defense expert Yuval Azulai said the Ministry of Defense and IAI's engineers "are so convinced that the missile will work that they've decided not to waste precious time and to begin production.

"Few interception tests are planned anyway, and if the tests that will be carried out indicate a gap between planned and actual performance, minor software updates should be able to correct them."

Arrow 3 is expected to become operational in 2015, and planners at the Defense Ministry are already thinking about future upgrades of the system to give every Iranian missile an explosive reception," Azulai said.

The two-stage Arrow 3 system successfully passed its second flight test over the eastern Mediterranean Sea Jan. 3 and reached its operational altitude outside Earth's atmosphere.

Officials said the "kill vehicle" jettisoned its booster rocket and carried out "various maneuvers" in space for several minutes using thrust vectors.

During the 10-minutes test, it communicated well with the system's advanced Green Pine radar developed by Elbit Systems subsidiary Elta Systems and the command-and-control center built by Tadiron, now part of Elbit's Elisra division.

Arrow 3 is designed to intercept ballistic missiles in space before they're over Israel and shoot them down at high altitudes to disintegrate nuclear, chemical or biological warheads.

Unlike the Arrow 2 variant currently in service, which is designed to intercept ballistic missiles at lower altitudes within Earth's atmosphere with explosive warheads, Arrow 3 uses interceptors that ram their targets.

Arrow 3 will constitute the topmost tier of a multilevel missile defense shield known as Homa, Hebrew for Wall, that's being put together with hefty U.S. funding over and above the annual $3.1 billion in U.S. military aid Israel received.

Arrow 2, operational for several years, will be its back-up, gunning for any ballistic missiles that slip through the Arrow 3 screen.

The next level down will be David's Sling, designed to counter medium-range missiles and cruise missiles. It's being developed by Rafael Advanced Defense Systems, Israel's biggest defense company after IAI, and the U.S. Raytheon Co.

Rafael's Iron Dome system, designed to intercept unguided rockets and short-range missiles, forms the bottom level.

It's been operational since early 2012 and by the military's tally has racked up a kill rate of 84.6 percent against the rockets unleashed by Palestinian militants in the Gaza Strip it has engaged.

On Saturday, Rafael announced on its website that it plans to unveil yet another system, Iron Beam which uses a high-energy laser to destroy short-range rockets, artillery and mortar shells, at the Singapore Air Show to be held Feb. 11-16.

It's designed to complement Iron Dome, and once operational would reduce the cost of intercepting rockets, such as those used by the Palestinians and Hezbollah in Lebanon.

Each radar-guided Iron Dome interceptor costs nearly $100,000 but Iron Beam would cost significantly less.

The United States and Israel worked on a laser-based missile defense system known as Nautilus (1996-2005). It cost $300 million, but was shelved because of its perceived poor performance in cloudy weather and in countering salvos of missiles and rockets.

The tactical high energy laser project was conducted by the Northrop-Grumman Corp., the prime contractor, with a group of Israeli companies that included IAI, Rafael, Elbit and Tadiran.

In February 1996, Nautilus shot down a rocket in a test at the White Sands Missile Range in New Mexico, the first time a rocket had been destroyed in flight by a laser beam.

But the program was constantly held up in the U.S. Congress and in 2001 Israeli commanders deemed Nautilus irrelevant and too expensive.