The suit filed by residents of Sderot contends the government has thus far failed to deploy the Nautilus, a laser missile-defense system being developed specifically to knock out incoming small rockets such as the Kassam and Katyusha that are fired into Israel by Palestinian guerrillas in Gaza.

"Israel just stopped developing the system," said attorney Nitsana Darshan-Leitner said. "Hezbollah wasn't considered a threat at the time and there weren't many rockets falling. Now that people are constantly living under fire, Israel decided to create a new system from scratch."

The Nautilus program was scrubbed in 2000 due to budgetary issues shortly before it could have become operational, IsraelNN.com said Tuesday. An entirely new system using interceptor missiles rather than lasers is still being developed.

People living in Sderot contend the Nautilus is gathering dust in the United States and could be deployed in Israel with little difficulty.

Defense experts, however, told IsraelNN.com the Nautilus has some technical limitations making it less the panacea that the lawsuit contends it is.