The device was displayed in the United States, where it is expected to be marketed soon.
The twin-rotor, vertical take-off UAV is optimized for operations in urban zones.
The mini-helicopter is so compact it can be carried in backpacks, with spare batteries and a computer, by two soldiers who control it from a laptop computer.
At 4.76 feet long and a rotor span of 2.46 feet, IAI boasts that the Ghost is small enough to fly into buildings through windows to provide real-time intelligence for Special Forces or company-size infantry units.
Its imaging capabilities, day and night, are enhanced by its ability to provide unique horizontal, or eye-level, visibility for ground forces that lookdown UAVs cannot, giving troops a more comprehensive view of their targets and operational environment.
State-owned IAI, flagship of Israel's defense industry and a leading manufacturer of UAVs, first put the Ghost on display in March.
It got its first U.S. outing at the Association of Unmanned Vehicle Systems International last week in Washington with Stark Aerospace, a subsidiary of IAI North America.
The battery-powered craft, with its low acoustic signature and ability to hover, is considered ideal for stealthy surveillance.
That could include tracking suspects marked for assassination by armed UAVs, helicopter gunships or F-16 strike jets using precision-guided munitions, a tactic used frequently by the Israelis against Palestinian militants.
IAI, whose Malat Division developed the Ghost, says it's intended "for reconnaissance missions in urban settings" where many of what the Israelis call "targeted killings" take place.
The new craft's ability to take off and land vertically makes it adaptable in rugged combat terrain or deployment on warships.
The Ghost uses a pair of powered rotors mounted on rotating shafts at the tip of a fixed wing for loft and propulsion. The engines swivel for takeoff and landing, as well as for hovering.
It has a range of around 2.5 miles, a flight endurance of 6 hours and speed of around 37 miles an hour.
It's the second tilt-rotor UAV to be developed by IAI. Malat Division unveiled the Panther, a larger craft, last October. The Panther, also on display at AUVSI, has a takeoff weight of about 138 pounds and a wingspan of 25 feet. It can stay airborne for 6 hours.
It's also electrically powered and can be carried in a backpack by a single soldier, IAI says.
IAI also produces the Eitan, one of the world's largest UAVs, able to fly higher and longer than most drones.
The Eitan was unveiled in February 2010. It can remain aloft for 24 hours and fly as far from Israel as the Persian Gulf, putting Iran, deemed a strategic threat by Israel, within its reach.
The 4.5-ton, turboprop-powered craft, part of IAI's Heron family which is operational with German and other Western forces in Afghanistan, has a wingspan of 85 feet, slightly small than a Boeing 737 airliner.
It carries a payload of up to 1 ton that includes advanced imaging, radar and mapping systems. It has a ceiling of 43,000 feet.