The development of the Arrow-3 program, which is being carried out by state-owned Israel Aerospace Industries and Boeing of the United States, is a year behind schedule.
The first full-scale test, firing the two-stage missile against a simulated target, had been planned for this month but the U.S. weekly Space News reported the flight has been postponed until the end of the year.
IAI declined to say what the problem is but Israel's Globes business daily reported that it appears to be serious because the test missile has been returned to IAI for unspecified repairs from the launch site at Palmachim Air Base on the Mediterranean coast south of Tel Aviv.
Israel's national news agency reported in August that the new Block 4 generation of interceptors, radars and technologies for synchronizing Arrow-3 with U.S. systems is being installed in Israeli batteries, a process that could take some time.
Arrow-3, largely funded by the United States since the program was launched in 1988, is designed to intercept long-range ballistic missiles, which for the Israelis these days means Iranian or Syrian weapons.
It will be the top level of a four-tier missile defense shield, Israel's most advanced anti-missile system, able to intercept hostile missiles in space outside Earth's atmosphere. It will be able to engage at altitudes double that of the Arrow-2, the current mainstay for covering against ballistic missiles, using detachable warheads that become killer satellites that seek out targets and crash into them.
This highly maneuverable system uses a lighter missile than Arrow-2, not only extending Arrow-3's operational altitude but the missile's range as well.
The Israeli military's website says the mobile Arrow interceptors include a number of sensors able to identify and intercept incoming missiles with extreme accuracy. These are hooked into long-range, ground-based Super Green Pine radar systems which can identify and track missiles and a new missile control center linking the Arrow batteries, collectively known as the "Defensive Sword" unit.
The semi-mobile radar unit is an advanced version of the EL/M-2080 Green Pine system used in Arrow-1 and 2. It's built by Elta, a subsidiary of IAI's Electronics Group. The various components are controlled by the mobile Citron Tree battle management center, built by Israel's Tadiran Electronics.
Since all these components are mobile to one degree or another, the system as a whole is more likely to survive pre-emptive strikes than fixed systems.
Arrow-3 is due to become operational in 2014 but it's not clear whether the current problems will delay that.
Arrow-1 was deployed in 2001 and replaced by Arrow-2. That system remains operational and will be maintain as a backup for Arrow 3, doubling Israel's chances of nailing hostile ballistic missiles.
The new variant is considered to be a far more advanced weapon than the U.S. MIM-104 Patriot, a long-range air-defense system built by Raytheon Integrated Defense Systems.
Israel's air defense shield has been integrated with U.S. systems during recent joint exercises to combat missile attacks.
Overall responsibility for Arrow lies with the U.S. Missile Defense Organization in Washington and the Israeli Defense Ministry in Tel Aviv.
IAI's MLM Division is the prime contractor. Apart from Boeing, which manufactures some 35 percent of the missile, key U.S. subcontractors include Lockheed Martin Missiles and Fire Control, which makes the radar seeker, and Raytheon, which produces the infrared seeker.
Boeing is expected to produce at least half of the Arrow-3 interceptors in the United States, with Israel handling the integration.
It sees prospects for export deals, something both Boeing and IAI are keen to promote as foreign sales of weapons systems have become of paramount importance to defense contractors amid widespread defense cutbacks.
India would like to buy an Arrow battery and purchased a Green Pine radar system in 2001. South Korea's also reported to be interested.
However, so far the Americans have blocked export initiatives, citing concerns regarding the Missile Technology Control Regime that limits the proliferation of ballistic missile technology.