The Israeli security cabinet on Sunday gave the green light for the manufacture of a defence system capable of intercepting short-range rockets such as those fired by Gaza militants, army radio said.
The cabinet allocated 811 million shekels (207 million dollars, 144 million euros) towards the development and manufacture of the missile defence system, it said.

The system -- dubbed "The Iron Dome" -- will be developed by the Israeli arms firm Rafael and is expected to be operational within two years. The defence ministry first ordered its development in February.

In addition to being able to intercept the home-made rockets fired from the Gaza Strip by Palestinian militant groups, it will also be able to shoot down Katyusha-type short-range rockets of the kind fired by Lebanon's Hezbollah militia during last year's 34-day war with Israel.

During that brief but bloody conflict, Hezbollah fired nearly 4,000 rockets into Israel, killing more than 40 civilians.

In Israeli territory around Gaza, 12 people have been killed as a result of some 4,000 rockets militants have fired into Israel since the start of the second Palestinian uprising in September 2000.

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