The Arrow BMD (ballistic missile defense) system that now protects Israel was co-developed and produced by Boeing and Israeli Aircraft Industries (IAI), but funded mostly by the U.S. MDA. Designed to offer better protection than the Patriot PAC-3, development began in the late 1980s with Israeli industry providing the L-band radar and the command and control system. The vertically-launched Arrow 2 two-stage missile provides terminal phase interception with an electro-optical sensor and a blast-fragmentation warhead. There have been three successful flight tests. The system was declared operational in 2000.
IAI is leading the development (with Boeing) of the Arrow 3 interceptor, an exo-atmospheric missile with a high-resolution infrared sensor on a gimballed seeker. The fire-control system would not change from the Arrow 2 system.