Dubbed "Turning Point 5," the drill conducted by the Israeli army's Home Front Command will test an array of scenarios including damage caused from missile attacks to vital national infrastructure such as the electric grid and the country's water systems.
During the drill, the army will also simulate the evacuation of hundreds of thousands of people from areas supposedly hit by missiles, Israeli defense officials said.
The army estimates Israel could be hit by as many as 800 missiles a day from various fronts in a future war, The Jerusalem Post said.
During the drill, messages warning residents of incoming missile attacks will be transmitted for the first time on mobile phones.
Eighty municipalities and local councils will participate in the exercise, the English language daily said.
On Sunday, security personnel will test an array of scenarios including the crashing of a military helicopter in a residential neighborhood, massive protests by the Arab sector in Israel and chemical agents found in Lake Kinneret, Ynetnews.com said.
Sirens will be sounded throughout the country Wednesday and residents will be called to enter bomb shells and security rooms. The country's schoolchildren will also practice entering shelters during the week.
Israel has informed neighboring countries about the week-long drill, Israel Radio said.