Four years after Hezbollah exposed Israel's vulnerability to short- and medium-range rockets, Israeli defense officials finished testing on Monday what is supposed to be the answer.

Israel's Iron Dome missile defense system is designed to intercept salvos of primitive rockets from Gaza and Lebanon, drastically reducing the ability of Hamas and Hezbollah to hit Israeli population centers. It's also a blow to Iran, which supports both militant groups, and could use them as proxies in a broader conflict against Israel.

But analysts caution that Iron Dome is not a game-changing development in the Middle East standoff. Though it will give Israeli civilians a sense of added security, they will still be forced to take cover in case of an attack because the system – while capable of taking down multiple missile attacks from different directions – is not foolproof.

"The short-range and medium-range rockets can be launched from every bush in southern Lebanon and every hole in Gaza. The Iron Dome is almost the only effective anti-rocket rocket that can minimize the damage,'' said Ron Ben Yishai, a military and intelligence commentator for the news outlet Yediot Ahronot. "If the system can intercept the rockets that are aimed at built up areas, or vital infrastructure, it's a big relief for Israelis. But it isn’t a silver bullet.''
Security blanket too small for bigger cities

During the 2006 war in Lebanon and the 2009 war in Gaza, Israel's high-tech military was helpless to stop crude rockets, whose biggest impact was sowing panic and paralysis on the Israeli homefront. A handful of civilians were killed.

The security blanket provided by the system is expected to boost public morale, relieving pressure on political leaders from knee-jerk responses.
One Iron Dome battery is enough to protect a medium-sized Israeli city from rockets with a range of up to 44 miles, but it is insufficient to shield Israel's largest metropolitan areas such as Beersheva, Haifa, and the suburbs around Tel Aviv including its surrounding suburbs.

The system can make decisions within seconds whether or not the missiles are headed toward strategic targets or population areas so as not to waste interceptors on Kassams and Katyushas. which fall in uninhabited areas 80 percent of the time.
$21 million price tag

And yet, the price tag for one Iron Dome battery is as much as $21 million, where as the rockets from Gaza are a few hundred shekels. It's unclear how Israel will pay for a full deployment of 15 to 20 batteries, though President Obama reportedly pledged assistance.

Israeli officials believe Iron Dome could prompt militants to think twice before firing at Israel.

"It improves the deterrence of Israel, because it becomes less worthwhile for them to fire at us,'' says Yosef Kuperwasser, a former army general and the director general in Israel's ministry for strategic affairs.
Iron Dome 'first step' toward a more robust system

The Iron Dome system is one component of Israel's multi-tiered defense against missile threats. The Magic Wand system has been designed to counter medium-range rockets with ranges of up to 130 miles. And the Arrow-3 missile, a joint project with the US, is supposed to intercept ballistic missiles shot from regional foes like Iran.

"[Iron Dome] is a major step toward a much more robust system of missile defense,'' says Gerald Steinberg, a political science professor at Bar Ilan University. "Despite the announcements of the success, it's still a first-generation system which can be overwhelmed. Over time the system will improve.''