TEL AVIV, Israel, July 27 (UPI) -- Pakistan's cruise missiles that can hit hundreds of miles inside India prompted New Delhi to accept an Israeli plan to develop a cruise missile interceptor.

The Indian government has accepted the Israeli offer in principle. An initial agreement was signed but the final details, including the scope, content and price of the project are yet to be concluded, an Israeli official close to the negotiations told United Press International on condition of anonymity.

Pakistan's cruise missile, called Babur, is capable of carrying nuclear and conventional warheads to a distance of 700 kilometers (437 miles) and officials said it was developing a version with a range of 1,000 kilometers (625 miles), PakMilitary.net reported. That means New Delhi is already within its range.

The Barak-8 system the government-owned Israel Aircraft Industries proposed is based on an existing naval point defense system.

The missile is launched vertically but rapidly leans over and races towards its target, be it a sea skimming missile or a cruise missile.

The IAI proposed to adapt, develop and modernize the system so that it may be launched from the ground, have a new radar, and other enhanced capabilities, the source said. It's expected to cost some $1.5 billion to $2 billion, but usually such projects lead to cost overruns. It is not clear when the system could be ready.

The Indian government wants some of the work done there, the source said.

India has been a "major Israeli arms receiver," according to Tel Aviv-based Institute for National Security Studies.

India has ordered three Phalcon airborne early warning systems, drones and a radar that in Israel is part of the Arrow anti-ballistic missile system. India is set to launch an Israeli spy satellite in a few weeks.