Patriot missiles were fired from the Palmahim Israeli air base, south of Tel Aviv, on Monday at decoy enemy missiles, as part of the final stage of the joint US-Israeli AC12 missile defense exercise.
The Patriot missiles, fired towards the Mediterranean Sea, successfully intercepted the decoys.
The interception test is the last part of the three-week AC12 exercise - the largest missile defense exercise of its kind.
One thousand American soldiers are on Israeli territory to take part, and a further 2,000 US troops in Europe and the United States will take part via remote defense computing systems. An equal number of Israeli soldiers are taking part.
Israeli air defense systems, such as the Iron Dome anti-rocket shield and Arrow 2 anti-ballistic missile batteries, have been deployed during the exercise, as well as US and Israeli Patriot batteries. American naval ships carrying the Aegis combat system, which can intercept missiles, took part, and at least one US Navy ship docked at Haifa port.
Israel and the US have spent 30 million dollars each on the drill.
Defense Minister Ehud Barak oversaw the interception at Palmahim air base. "This is foremost an expression of the deep cooperation between us and the US, and the coordination of our systems ahead of possible future tests," the defense minister said.
"It is also proof that the old and new systems work as they should... Not far from here to the south... Iron Dome intercepts time after time every missile targeting a city," he added.
Barak added that the missile defense capabilities are an important factor in any operation against Hamas and associated terror groups in Gaza, adding that the operation could grow wider in scope.