The two countries have approved a proposal to continue joint testing and enhancement of the Arrow-2 system, officials said. The United States is expected to use the data for its own missile defense programs, Middle East Newsline reported.

"The Arrow-2 program has been a very successful program and must be continued amid the Iranian threat," an official said. "Israel and the U.S. clearly share an interest in missile defense."

The Arrow System Improvement Program was meant to end in 2008. Under the latest agreement, first reported by the Washington-based Defense News, the program would be extended for another five years, with the Pentagon's Missile Defense Agency planning to contribute at least $80 million. Israel, via U.S. military aid, would contribute a similar amount.

Officials said the Defense Department would fund an effort to make the Arrow-2 interoperable with all U.S. missile defense systems. They said this would include the PAC-3, Aegis and the Theater High Altitude Area Defense system.

"The technology used by Arrow has also helped the U.S. in our missile defense system development, and we look forward to continuing our cooperative and mutually beneficial program efforts in the years ahead," U.S. Missile Defense Agency spokesman Rick Lehner said.

The Arrow-2 test was the first time two missile defense batteries operated together. The batteries communicated through the U.S.-origin Link 16 data distribution system, which had earlier connected PAC-3 and Arrow batteries.

Israel and the United States have been developing an enhanced Arrow-2 in a program that includes Boeing and the state-owned Israel Aerospace Industries. Officials said the so-called Block 4 Arrow-2 interceptor, designed for greater speed and altitude, would be tested in April 2007.

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