Israel is increasing the production of its Arrow anti-missile missiles. Costing over three million dollars each, and partly constructed in the United States (by Boeing), the Arrow missiles are Israel's principal defense against Syrian and Iranian ballistic missiles. Since Arrow entered service nine years ago, Only about 120 missiles have been built. Currently, Israel has about a hundred Arrows available, and would like to increase that to 150 or 200 in the next few years.
More than half the nearly three billion dollar cost of developing and building Arrow has come from the United States. In addition, American firms have done some of the development work, or contributed technology. The U.S. wants to cut its contribution for future Arrow development, if only to allocate more resources to U.S. anti-missile systems (Aegis SM-3, THAAD and GBI). American support of Arrow was originally sort of an insurance policy, in case similar U.S. effort didn't work out. But the American missiles did work, and now Israel is asking for Aegis SM-3 systems, which can take down longer range Iranian systems that Arrow might have trouble with.
Israel has two batteries of Arrow, and over a hundred missiles available. An Arrow battery has 4-8 launchers, and each launcher carries a six missiles in containers. The Arrow was developed to knock down Scud type missiles fired from Syria, Saudi Arabia or Iraq. The two ton Arrow I is being replaced with the 1.3 ton Arrow II, which can shoot down longer range ballistic missiles fired from Iran. Israel is currently developing and testing an upgraded Arrow II, which can take down longer range Iranian missiles. An even more effective Arrow III is in the works, but this is not expected to be ready for use for at least five years.
The U.S. has provided Israel with a mobile X-band radar that enables it to detect incoming ballistic missiles father away. Currently, the Israeli Green Pine radar can only detect a ballistic missile fired from Iran when the missile warhead is about two minutes from hitting a target in Israel. The X-band radar would allow the Iranian missile to be spotted when it was 5-6 minutes away, enabling the Israeli Arrow anti-missile missile to hit the Iranian warhead farther away and with greater certainty. Israel also wants to buy a land based version of the Aegis anti-missile missile.