Washington has reassured Tel Aviv that it will continue to fund a costly new-generation Israeli missile system despite recent cuts to the US defence budget.
The Arrow interceptor project was launched two decades ago as part of late US president Ronald Reagan’s now-defunct star wars programme.
The development cost for the coming year is expected to hit $100 million (£64 million).
Israeli officials had been worried that the project would be axed by US Defence Secretary Robert Gates, who scrapped several high-profile weapons programmes last month.
But Israeli media reported on Wednesday that Washington has pledged to continue to pay the full cost of the development and production of the Arrow 3 system.
According to the Ynet website, US Undersecretary of Defence for Policy Michelle Flournoy made the assurances at a session of the annual US-Israeli Strategic Dialogue in Washington this week.
The Arrow 3 will be a longer-range version of the Arrow defence system currently deployed by Israel.
Israel and the US are also developing David’s Sling, a missile defence system with a range between 43.5 and 155 miles against medium-range missiles.
On Wednesday, Iranian President Mahmoud Ahmadinejad said that the Islamic republic had successfully test-fired a new medium-range missile.
US Defence Secretary Gates said that the test appeared to have been successful.
Later this year, the Israeli military will hold an unprecedented massive exercise with the US military to test three different ballistic missile defence systems, the Israeli-made Arrow and the US THAAD and Aegis, which will be brought to Israel for the war games.
The drill, which will span several days, is called “Juniper Cobra.”
Elsewhere, Israeli security forces demolished a minor settlement outpost in the West Bank yesterday, three days after US President Barack Obama had told visiting Prime Minister Benjamin Netanyahu that he must halt settlement activity.
Israeli peace activist Dror Etkes said that dismantling Maoz Esther, one of the newest, smallest outposts, which consisted of just seven huts, was a token gesture that changed little.
“It is far, far away from being something significant in changing the reality in the West Bank,” Mr Etkes said.