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The budget difficulties that long delayed the development of the Iron Dome rocket-interception system have apparently been resolved. The Pentagon informed the Defense Ministry on Wednesday that U.S. President Barack Obama had approved $205 million in special aid for Israel to establish 10 control centers for operating the system.

Iron Dome was successfully tested in January, convincing U.S. defense officials of the system's effectiveness in intercepting short-range rockets such as Qassams fired from the Gaza Strip and Katyushas from south Lebanon.

Around NIS 800 million has been earmarked for the first phase of the project, which will include the development, testing and manufacture of two control centers. The air force has also trained an anti-aircraft brigade to operate the control centers once they become operational.

Until now, however, the program had not been allocated sufficient funds for the control centers to be set up. The military refused to fund it from its own budget, stating that priority must be given to maintaining Israel's offensive operational capabilities.

Among other things, Israel formed an agreement with an East Asian country (French media reported that it was Singapore ) over cooperating on funding development of the project's more advanced phases. Israel subsequently asked U.S. officials if Washington could fund Iron Dome as a special project, above and beyond the annual defense aid it provides Israel.

The request was again discussed during Defense Minister Ehud Barak's visit to Washington earlier this month in conversations with Obama and high-ranking officials in the U.S. defense and state departments.

On Wednesday evening Michele Flournoy, the U.S. under secretary of defense for policy, informed Barak that her government had decided to accede to Israel's request.

Defense Ministry director-general Udi Shani, currently visiting Washington, is scheduled to meet with U.S. representatives over the next few days to iron out the details of how the additional funding will be managed.

A top Israeli security official said yesterday that the Americans' positive response to the request represents "a breakthrough, one which will make it much easier for us to continue developing the project. Until now, funding was the biggest question mark in the matter.

"The Americans were skeptical at first, but were impressed by the results of the last interception test and became convinced that the system would work," said the official. He added that Israel's security apparatus still needs to decide how it will divide the money, which could be funneled toward producing radars or firing units, or the development of the interceptor missiles themselves.

Each control centers will cost between NIS 40 and 50 million and be capable of protecting a city the size of Sderot. Military planners believe some 20 control centers will be required to provide security to Israeli communities within rocket-firing distance of the Gaza Strip and southern Lebanon.