Israel's “Iron Dome” missile defense system passed its test Sunday morning with flying colors, according to security officials, who say the system will also be able to defend Israel’s civilians against mortar attacks as well.

The “Iron Dome” works by intercepting medium-range Katyusha rockets as well as the shorter, homemade Kassam rockets and mortars fired by Gaza terrorists, using a small kinetic missile interceptor called the “Tamir.”

The system, when tested a year and a half ago, was found to be incapable of defending against the shorter-range Kassams rockets, which can sometimes reach their target within 20 seconds.

It was previously believed the system would be ineffective against mortar attacks for the same reason since mortar shells hit targets within 10 seconds .

Developed under contract by Israel Military Industry’s Rafael Advanced Defense Systems, the $300 million system which was tested at the Ramon Air Force Base in southern Israel will reportedly be ready for operation by 2010.

It is meant to become part of a multi-layered defense system aimed at protecting Israeli Gaza Belt residents from shelling by Gaza terrorists, and residents in northern Israel from rocket attacks fired by Hizbullah terrorists in southern Lebanon.

The system might also be used to protect the rest of Israel from longer range attacks launched against the Jewish State from Syria or Iran.  Israel has asked the United States to foot the bill for approximately 65 percent of the development costs for the project.

Palestinian Authority terrorists have launched more than 4,000 Kassam rockets at southern Israel since the Disengagement from Gaza in August 2005.

Residents in the north suffered a similar number of rocket attacks, with more than 4,000 Katyusha missiles fired by Hizbullah terrorists at Israeli communities as far south as Afula during the 2006 Second Lebanon War.