TEL AVIV, Israel, Jan. 14 (UPI) -- Rafael Advanced Defense Systems, Israel's second-largest state-owned defense company, is reported ready to start co-producing its Iron Dome anti-missile defense system with the Raytheon Co. of the United States, consolidating an alliance that's already developing the Stunner interceptor missile of Rafael's David's Sling system designed by Rafael.

Defense News, a U.S. weekly, says Rafael is expected to sign on to a new deal with Raytheon, the world's biggest missile manufacturer, on the Tamir, Iron Dome's maneuverable, radar-guided interceptor.


Raytheon, headquartered at Waltham, Mass., said in 2012 it would welcome the opportunity to partner Rafael on Iron Dome production.

Under the new arrangement, Raytheon would head a group of U.S. subcontractors for co-production of Tamir components and subsystems, with final assembly of the missile batteries carried out by Rafael in Israel.

Iron Dome is the only combat-tested component of a planned four-tier missile defense shield Israel is constructing.

Defense News reported a final agreement between the U.S. and Israel governments is expected within weeks.

U.S. lawmakers representing states with major defense industry links have long been pushing for co-production deals with Israel's high-tech defense sector -- which has developed Iron Dome, along with David's Sling and the Arrow 2 and Arrow 3 systems dedicated to form the unique defense shield known as Homa, Hebrew for The Wall.

All the systems have been heavily financed by the United States.

The Arrow program, which has cost around $1 billion so far, dates back to the 1980s. Arrow 3 is being developed by state-owned Israel Aerospace Industries and the Boeing Co. of the United States.

Members of the U.S. House of Representatives demanded in April 2012 the United States get access to Iron Dome technology before approving $680 million in military aid to Israel from fiscal 2012 to 2015, so it could acquire more batteries for the system, designed to intercept short-range rockets used by Hezbollah in Lebanon and Palestinian militants in the Gaza Strip.

The Pentagon has shown little interest in acquiring Iron Dome technology. But pressure has built from the House Armed Services Committee as U.S. defense budget cuts have built up significantly amid the threat of widespread closures in the defense industry.

Lawmakers claimed the United States had already invested nearly $900 million in Iron Dome development and production, including an upgraded variant, and should be allowed some rights to the system's proprietary technology.

The new deal between Rafael and Raytheon, pending approval by Israel's Defense Ministry and the U.S. Department of Defense's Missile Defense Agency, could be a landmark development that will give U.S. defense companies access to Israeli technology on an unprecedented level.

"We didn't start with Raytheon," said Pini Yungman, director of Rafael's Missile Defense Systems Directorate. "But after careful consideration we understood the strategic partnership that has proven itself with David's Sling would provide the most benefit on Iron Dome and plans, in the future, to extend our activities for possible use by the U.S. Army."

Defense News reported David's Sling's two-stage Stunner interceptor could offer a low-cost alternative to the single-stage Patriot PAC-3 air-defense missiles built by Lockheed Martin.

Although successive U.S. administrations have provided substantial funding for the Israeli systems, all the key elements of Iron Dome, including the interceptor, its guidance system, radar and battle management system remain under Israeli ownership.

The Israelis, dependent on $3 billion in U.S. military aid a year, have been reluctant to share the rights on their missile-defense technology which has broken new ground in recent years.

There was little visible enthusiasm for sharing technology that could ultimately produce major export sales for Israel's defense sector, which increasingly relies on exports to maintain production lines for the Israeli armed forces.

Possibly more important, those sales pay for research and development by Israelis firms that produces such weapons as Iron Dome, which the military says has destroyed 84.6 percent of all hostile missiles and rockets it has engaged since it became operational in early 2011. Some Israeli missile experts question that kill rate.

Iron Dome constitutes the bottom tier of the Homa shield. David's Sling is designed to counter medium-range weapons and cruise missiles.

IAI's Arrow 2 is designed to counter Iranian and Syrian ballistic missiles at high altitude and long range. Arrow 3 will intercept ballistic weapons outside Earth's atmosphere.