Israel considers a nuclear-armed Iran to be an existential threat, citing Iranian calls for Israel's destruction, its support for anti-Israel militant groups and its missile and nuclear technology.
The test came as world powers and Iran open a new round of nuclear negotiations in Geneva later on Wednesday, talks that could result in a landmark deal that would force Iran to make concessions on its nuclear program in exchange for the easing of Western sanctions that have crippled its economy.
Iran seeks a rollback in U.S.-led economic sanctions, while the West is pressing it to curb its uranium enrichment the process to make nuclear fuel, which is a potential pathway to atomic weapons. Israel has voiced grave concern that a deal with Iran now may ease pressure on the Islamic Republic while allowing it to continue to strive toward acquiring a bomb.
Uzi Rubin, a former head of Israel's missile defense program, said the timing of the test was unrelated and merely a planned step in Israel's long-term plan to complete a defense umbrella against the myriad of rocket threats the country faces.
He said the test, only the second of its kind, was a "milestone" but refused to provide operational details.
The Iron Dome protects against short-range rockets fired by militants in the Gaza Strip and Hezbollah guerrillas in Lebanon. It shot down hundreds of rockets from Gaza in last year's round of fighting.
The next generation of the Arrow, now in the development stage, is set to be deployed in 2016. Called Arrow 3, it is designed to strike missiles when they are outside the earth's atmosphere, before they are on their downward path toward their target. Together, the two Arrow systems would provide two chances to strike down incoming missiles.
Israel also uses U.S.-made Patriot missile defense batteries against mid-range missiles, though these failed to hit any of the 39 Scud missiles fired at Israel from Iraq in the 1991 Gulf War. Manufacturers say the Patriot system has been improved since then.