The test did not involve intercepting a target and the system requires further testing before it becomes operational, the Defense Ministry said.
Defense officials said the interceptor is designed to bring down long-range missiles, including the Iranian Shihab 3, The Jerusalem Post reported.
"This successful test is a milestone in Israel's operational and defensive capabilities vis-a-vis threats in the regional arena," a ministry statement said.
Defense Minister Ehud Barak called the test "an important milestone for Israel's defensive array."
The Arrow 3, considered to be among the most advanced missile detection systems in the world, was developed by Israel's Aerospace Industries and the American Boeing company. The system is considered to be Israel's main line of defense against any missile attack.
In January, the Arrow 3 was tested to check its propulsion system and other tracking senses.
In another military development, the Israeli army said it deployed an Iron Dome missile defense battery in central Israel for a drill. The battery, developed by Rafael Advanced Defense Systems, is designed to intercept and destroy short-range rockets.
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