Israel is planning to deploy four more batteries of its "Iron Dome" short-range missile defence system, Defence Minister Ehud Barak said on Sunday.

Speaking on military radio, Barak said: "With the financial help of the Americans, we hope to equip ourselves with four new 'Iron Dome' batteries so we will have six in operation in the next two years."

He added that a second battery would soon be operational on the Israeli border with the Gaza Strip.

The first battery of the unique multi-million dollar system came into operation a week ago, stationed outside the southern city of Beersheva, in the Negev desert, just days after it was hit by several Grad rockets fired from the Gaza Strip amid a rise in tensions and tit-for-tat violence.

The system, the first of its kind in the world and still at the experimental stage, is not yet able to provide complete protection against the hundreds of rockets fired from Gaza into southern Israel, officials have said.

The system, developed by Israel's Rafael Advanced Defence Systems with the help of US funding, is designed to intercept rockets and artillery shells fired from a range of between four and 70 kilometres (three and 45 miles).

Each battery comprises detection and tracking radar, state-of-the-art fire control software and three launchers, each with 20 interceptor missiles, military sources said.

Militants in Gaza and Lebanon's Hezbollah militia have fired thousands of projectiles at Israel in the past.

According to plans, the system will first be deployed along the border of the Hamas-run Gaza Strip, from where militants fired a daily barrage of improvised rockets prompting Israel to launch a devastating 22-day offensive in December 2008.

It will then be deployed along the Lebanese border, from where Hezbollah militants fired some 4,000 rockets into northern Israel during a 2006 war. It was that experience which prompted the development of Iron Dome.

Israel believes Hezbollah now has an arsenal of some 40,000 rockets.

But a complete deployment is expected to take several years.

In May last year, US President Barack Obama asked Congress to give Israel 205 million dollars to develop the system, on top of the annual three billion dollars Israel receives from Washington.

Iron Dome will join the Arrow long-range ballistic missile defence system in an ambitious multi-layered programme to protect Israeli cities from rockets and missiles fired from Lebanon, the Gaza Strip, Syria and Iran.

A third system, known as David's Sling, is currently being developed with the aim of countering medium-range missiles.