The US Defense Department has pledged its support to help Israel develop and finance the Arrow 3, head of US Missile Defense Agency Lt.-Gen. Henry Obering III told Israeli defense officials he met with on Wednesday in Tel Aviv.

Obering was in Israel on a three-day visit during which he met with Chief of General Staff Lt.-Gen. Gabi Ashkenazi, head of the Homa Missile Defense Agency Arieh Herzog, IAF Commander Maj.-Gen. Ido Nehushtan, Air Defense Forces Commander Brig.-Gen. Daniel Milo and officials from the Israeli Aerospace Industries.

The decision to help finance the multi-million dollar missile defense system did not come as a surprise. In May, The Jerusalem Post exclusively reported on a pledge US President George W. Bush had made to Prime Minister Ehud Olmert, during his visit to Israel to celebrate Independence Day, to obtain funding for the project.

The Israeli defense establishment and the Homa Missile Defense Agency decided in April to press forward with the development and production of Arrow 3, a more advanced version - in terms of speed, range and altitude - of the Arrow 2 currently in operation. Israel last tested its Arrow missile in February 2007.

The decision to begin development of the Arrow 3 was made despite a proposal by Lockheed Martin to purchase the Aegis system or the THAAD (Terminal High-Altitude Area Defense) missile defense system it is developing.

Defense officials said that the THAAD was currently unsuitable for Israel's needs and that an advanced model of the Arrow, made by IAI and Boeing, would successfully counter the ballistic missile threat from Iran and Syria.

Israeli defense officials added that in the event of a war with Iran, the US would likely deploy Aegis missile defense ships off Israel's coast to assist in intercepting incoming ballistic missiles.

Development of the new system has already begun at IAI; Israel is not waiting to secure the funding for the new missile defense system, which will likely become operational by 2012.