Israel has completed tests on its Iron Dome anti-missile system, designed to provide a response to the thousands of rockets fired at Israel by Hamas and Hezbollah, the defence ministry said.

The system, which can intercept short-range rockets and artillery shells, underwent its final tests in the past 48 hours, a statement said.

"For the first time, Iron Dome faced multiple threats simultaneously. All the threats were intercepted with complete success," the statement said.

The next phase in the development of the system was to integrate it into the army, the statement said.

Israel hopes the system will provide it with a means to dealing with rocket fire from the Hamas-ruled Gaza Strip and from Lebanon.

Palestinian militants have fired thousands of home-made rockets into southern Israel, prompting Israel's devastating assault on the Islamist Hamas in Gaza on December 27, 2008.

The Lebanese militant group Hezbollah also fired some 4,000 rockets into northern Israel during a 2006 war with Israel, which now believes Hezbollah has an arsenal of some 40,000 rockets.

"Making Iron Dome operational will transform Israel's political and security situation on the northern and southern fronts," said Pinhas Buchris, the ministry's director general.