The intercept of a dummy missile was the 17th test of the Arrow system, a U.S.-Israeli joint venture. Israeli defense officials said the interceptor was an upgraded Arrow II, designed to counter Iran's Shahab ballistic missile.
Israel has identified Iran as its biggest threat, citing the country's nuclear program and its development of long-range ballistic missiles. Those fears have been compounded by Iranian President Mahmoud Ahmadinejad's repeated calls for the destruction of the Jewish state.
Israel believes Iran is developing nuclear weapons that could pose an existential threat. Iran denies that and says its nuclear work is for peaceful purposes such as energy production. Israel has threatened military action, and Iran has said it would strike back, warning last month that Israel's own nuclear facilities were within missile range.
Iran's Shahab-3 missiles have a range of up to 1,250 miles (2,000 kilometers), putting Israel well within striking distance. Iranian officials were not available for comment on the Israeli test.
In a statement, the Defense Ministry said the interceptor shot down "a missile simulating a ballistic threat in especially challenging conditions." It called the test "an important step in the development program and the development of operational abilities to counter the growing threat of ballistic missiles in the region."
Defense Minister Ehud Barak watched Tuesday's intercept from a military helicopter, the ministry said. According to Israeli Embassy in Washington, Pentagon representatives also were present.
Prime Minister Benjamin Netanyahu, who has made the Iranian threat a top priority of his administration, congratulated defense officials for the successful test. "While we are for peace, we will know how to defend ourselves," he said.
The Arrow project is being developed by Israel Aerospace Industries Ltd. and Chicago-based Boeing Co. at a cost of more than $1 billion. It was spurred largely by the failure of the U.S. military's Patriot missiles to intercept Iraqi Scud rockets that struck Israel in the 1991 Gulf War.
Several batteries of Arrow missiles are already operational. But Israel has been working to perfect the system to deal with increasingly complicated threats, such as missiles that strike at extremely high speeds from high altitudes and could split apart as they approach their targets.
Iran has worked hard to increase the accuracy of its missiles. In November, it successfully test-fired the Sajjil, a solid fuel high-speed missile with a range 1,250 miles (2,000 kilometers). Solid fuel is considered a significant breakthrough because it increases accuracy.
Rick Lehner, spokesman for the Pentagon's Missile Defense Agency, said the Arrow is meant to intercept short- and medium-range ballistic missiles.
"This was the most advanced version of the Arrow weapons system in terms of the ability to perform the type of intercept that would be necessary to destroy a ballistic missile target," he said. He said that in conjunction with Patriot missiles, which strike at a lower altitude, Israel has "deployed a layered defense."
Israel is also developing a system to counter short and medium range rockets of the kind possessed by Palestinian and Lebanese militants. The system, called the Iron Dome, is set to be deployed next year.
The U.S. military has conducted separate tests in recent years of different components of the defensive shield, which is slated to include Patriot air defense batteries, anti-ballistic missiles launched from Navy ships and lasers mounted in planes designed to shoot down incoming missiles.
Last month, the U.S. military's ground-based mobile missile defense system successfully shot down a medium-range ballistic missile during a test in Hawaii.
It was the first time the military fired two interceptors at one target using the Terminal High Altitude Area Defense system, a program designed to shoot down ballistic missiles in their last stage of flight.
The drill followed up on a test that was planned for last September but had to be aborted when the target malfunctioned shortly after launch.