Israel on Wednesday installed a third battery of its Iron Dome rocket interceptors, placing it in the southern city of Ashdod, a target of rockets fired from Gaza, the defence minister said.

"Installation of the third battery is part of the national emergency plan which I announced several weeks ago and is a real expression of the protection of Israeli residents from rockets and missiles," Ehud Barak said.

Israel deployed the first battery of the unique multi-million-dollar system on March 27 outside the southern desert city of Beersheva, after it was hit by Grad rockets fired by Palestinian militants in the Gaza Strip.

On April 4, the system was also deployed around the southern port city of Ashkelon.

The first of its kind in the world and still at the experimental stage, it is not yet able to provide complete protection, but it has successfully brought down several rockets fired from Gaza.

Designed to intercept rockets and artillery shells fired from a range of between four and 70 kilometres (three and 45 miles), Iron Dome is part of an ambitious multi-layered defence programme to protect Israeli towns and cities.

Two other systems make up the programme -- the Arrow long-range ballistic missile defence system and the so-called David's Sling, or Magic Wand, system, intended to counter medium-range missiles.