Rafael announced Sunday it will establish a new Land Systems Division to develop and produce land warfare systems as well as naval systems, that will include security systems to protect land and marine facilities such as Israel's offshore natural gas fields in the eastern Mediterranean.
The Globes business daily reported the company will also establish research and development and engineering division to "coordinate activities in areas where the company has a track record of success, including the Iron Dome missile interceptor. The company invests more than 8 percent of its revenue in R&D annually."
Rafael will also establish "a new air systems directorate, which will oversee intelligence, surveillance, target acquisition and reconnaissance, or ISTAR, networking and communications as well as air-to-ground strike weapons," Globes said.
The company will develop "a new air dominance directorate, which will focus on air-to-air missiles, as well as air and missile defense, offering land-based rocket, air and missile defense systems, such as David's Sling and Iron Dome."
David's Sling, which Rafael is developing with the U.S. Raytheon Co., is a missile defense system designed to counter medium-range missiles. It's due to be deployed in 2014.
Iron Dome, wholly produced by Rafael with substantial U.S. funding, is designed to intercept short-range rockets.
The Defense Ministry says Iron Dome has racked up an 85 percent kill rate against Palestinian rockets since it became operational in the spring of 2011, although some critics dispute that figure.
These two systems will form the lower two layers of a four-tier missile defense shield that the Israelis are putting together.
The top layers, aimed at countering ballistic missiles at high altitude, will comprise Arrow-2 and Arrow-3 interceptors developed and manufactured by state-owned Israel Aerospace Industries.
Arrow-2 is currently operational, and Arrow-3, being co-developed with the Boeing Co. to shoot down ballistic missiles in space, is expected to enter service in 2016.
Israeli Defense Minister Moshe Yaalon, a former army general, said this month the multiyear program to restructure the military -- known as "Teuza," Hebrew for boldness -- is "revolutionary" and will change the way Israel fights its wars.
"We are not enslaved to technology," he declared July 11. "We're using it and adapting it to the new reality wherein the army versus army conflicts that we last saw 40 years ago in the Yom Kippur War are becoming less and less relevant. ...
"The foreseeable future is leading us to battles which will be determined by superior Israeli military technology, in the air, land and sea, with less heavy tools and through more and increasing use of sophisticated and unmanned technology, which gives us a significant advantage over any enemy."
Under Teuza, the Israelis will scrap several air force squadrons and much of its heavy armor force spearheaded by the Merkava IV tank assembled by state-owned Israeli Military Industries.
The reduction in force strength will save an estimated $1.9 billion in military spending, in line with the government's drive to slash the defense budget.
But the new operational doctrine, devised by chief of staff Lt. Gen. Benny Gantz, has been in the works for more than two years and is the result of a new assessment of Israel's war-fighting capabilities and the kind of challenges it will confront in the years ahead as much as it is a response to budgetary constraints.
The anticipated changes in doctrine, and therefore in the weapons systems employed, will undoubtedly have a significant impact on the country's defense industry, the most advanced in the Middle East.
Alex Fishman, veteran military analyst with the Yediot Ahronot newspaper, observed: "Even without the budgetary problem, the army would have had to change its operational outlook and its structure to adapt itself to the new threats in the arena. ...
"The military can afford to give up some of its ground and aerial platforms because its advanced intelligence and communications capabilities provide much more precise data on many more targets to many more weapons. ... Four fighter jets can do today what an entire squadron was incapable of doing 30 years ago."