The US has said it will provide the full funding for the development and production of the Arrow 3 anti-missile system, defense officials told The Jerusalem Post on Wednesday. The American decision was revealed during a session of the Strategic Dialogue that Defense Ministry director-general Pinchas Buhris held with his US counterparts in Washington. The Dialogue is held annually but Wednesday's session was the first meeting of senior Israeli defense officials with the Obama administration's new staff at the Pentagon. Israel has been concerned that the US - which has supported the Arrow project since its inception over 20 years ago - would end the funding due to major cuts made to the American defense budget by Secretary of Defense Robert Gates. The development costs for the coming year will likely reach some $100 million. The Dialogue was led on the American side by Under Secretary of Defense for Policy Michelle Flournoy. Buhris was joined on the Israeli side by outgoing ambassador to the US Sallai Meridor and the IDF military attachÃ© to the US, Maj.-Gen. Benny Gantz. Israel and the United States are also developing David's Sling - a missile defense system for medium-range missile with a range between 70 and 250 km. The Arrow 3 will be a longer-range version of the Arrow defense system currently in IDF operation. It will be capable of intercepting incoming enemy missiles at higher altitudes and farther away from Israel. Last month, the IAF held its 17th test of the Arrow 2 interceptor, shooting down a missile mimicking an Iranian Shihab ballistic missile. Later this year, the IAF will hold an unprecedented, massive exercise with the US military to test three different ballistic missile defense systems, the Israeli-made Arrow and the American THAAD and Aegis, which will be brought to Israel for the exercise. The drill, which will span several days, is called "Juniper Cobra."