Wednesday, November 25, 2009 3:51 AM

JERUSALEM -- With cutting-edge anti-missile systems and two new submarines that can carry nuclear weapons, Israel is readying a new generation of armaments designed to defend itself against distant Iran as well as Tehran's proxy armies on its borders.

Having failed to crush Hamas' firepower in its Gaza offensive last winter, or Hezbollah's in its 2006 war in Lebanon, Israel is turning to an increasingly sophisticated mix of defensive technology.

A system that can unleash a metallic cloud to shoot down incoming rockets in the skies over Gaza or Lebanon has already been successfully tested, according to its maker, and is expected to be deployed next year. The army is developing a new generation of its Arrow defense system designed to shoot down Iran's long-range Shihab missiles outside the Earth's atmosphere.

It has three German-made Dolphin submarines and is buying two more. They can be equipped with nuclear-tipped missiles which analysts say could be stationed off the coast of Iran. Israel says Iran, despite its denials, is trying to acquire atomic weapons. It has never confirmed its Dolphin fleet has nuclear capabilities, but senior officials acknowledge that commanders are fast at work devising a strike plan in case diplomacy fails.

The missile projects have their critics in Israel, who question their effectiveness and say they are too costly. And many Israelis would probably agree with U.S. former President Bill Clinton's recent warning to an Israeli audience that the country could achieve true security only by making peace with its enemies, who he said would always be able to improve their ability to attack.

"The trajectory of technology is not your friend," he said. "You need to get this done."

Under their overarching fear of nuclear annihilation by Iran, whose regime has repeatedly called for Israel's extinction, the more immediate threat is seen as coming from Iranian-backed Hezbollah and Hamas.

Israel's military believes Hezbollah has tripled its prewar arsenal to more than 40,000 rockets, some of which can strike virtually anywhere in Israel _ a dramatic improvement over the short-range missiles fired in 2006.

Hamas has also increased its rocket arsenal since last winter's fighting, said a senior military official who spoke on condition of anonymity in accordance with army regulations. Hamas recently test-fired a rocket that can travel up to 60 kilometers (40 miles), putting the Tel Aviv area within range for the first time, according to Maj. Gen. Amos Yadlin, Israel's military intelligence chief.

Israel's defense industry says it is close to deploying Iron Dome, a system that will use cameras and radar to track incoming rockets and shoot them down within seconds of their launch. The system is so sophisticated that it can almost instantly predict where a rocket will land, changing its calculations to account for wind, sun and other conditions in fractions of a second.

Shooting down a missile is a bit like stopping a bullet with a bullet. But Eyal Ron, one of Iron Dome's developers, said his system will fire an interceptor that explodes into a cloud of small pieces which make it unnecessary to score a direct hit.

"It's a great advantage because to bring an interceptor to a target flying at incredible speed to an exact point is very hard," said Ron, a specialist at mPrest Systems Ltd., an Israeli software firm developing the system along with local arms giant Rafael.

He said recent tests in Israel's southern desert were successful, and a final dress rehearsal is expected in December before the system goes live next year.

While Israelis who have endured years of rocket fire from Gaza are sure to welcome Iron Dome, the system does not have wall-to-wall support.

"Maybe it will be good during times like this when you have 10 rockets, but not for a war. If you invest in such a system, I think you're going to go bankrupt," said Gabriel Saboni, the head of the military research program at Israel's Institute for National Security Studies.

Iron Dome is one part of a larger strategy that includes more tanks and dozens of new armored personnel carriers equipped with technology to repel anti-tank missiles.

The ultimate trump card is a nuclear arsenal Israel refuses to acknowledge but which no one doubts exists.

The strategy that became obvious in the Lebanon and Gaza wars was simply one of overwhelming force to deter further attack.

This policy appears to have bought Israel a fragile calm on both its northern and southern borders, but it has come at a heavy price.

The military brass are deeply concerned that international criticism of Israel's conduct of the Gaza war, including allegations of war crimes contained in a high-profile U.N. report, will tie their hands in the future.

Military officials speaking on condition of anonymity said large resources are going into developing increasingly accurate weapons, such as bombs that cause damage over a smaller area and noisemaking explosions that scare away civilians before real bombs are dropped.

Few expect the current quiet to last indefinitely, and muscle-flexing on all sides attests to the elusiveness of a peaceful Middle East.

Iran is conducting large-scale air defense war games this week designed to protect its nuclear facilities from attack. Israel recently moved warships through the Red Sea toward Iran, and three weeks ago the Israeli navy captured a ship, the Francop, that it said was carrying a huge cache of Iranian weapons bound for Hezbollah.

Last week Netanyahu boarded a Dolphin submarine and then the missile ship that led the capture of the Francop. He thanked crew members for seizing the haul and told them that Israel is Iran's first target, "but not the last" _ reflecting his contention that Iranian ambitions are not just an Israeli problem.

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