The Arrow-3 system is being tested in Alaska, USA. The system has successfully intercepted atmospheric targets, the Israeli Defense Ministry said in a statement.
"Flight tests have been conducted in Alaska to test previously un test-tuled capabilities in Israel," the statement said.
Prime Minister Benjamin Netanyahu said, "now, Israel has the ability to act in response to ballistic missiles targeting us from Iran or anywhere else."
"This is a great achievement for Israel's security," he added.
US Ambassador to Israel David Friedman also attended a meeting between Netanyahu and the cabinet in Jerusalem on July 28 to watch a video of the experiment.
Fox News quoted information from the US missile defense agency (MDA) as saying that the Arrow-3 interceptor missile has reached an " important milestone" in development when it successfully tested and effectively intercepted an atmospheric target missile.
"The remarkable success in Alaska has brought confidence in Israel's future capabilities in defeating rising threats in the region. We are committed to supporting the Israeli government in upgrading its national missile defense capabilities to protect the state of Israel from emerging threats," said Jon Hill, deputy director of the MDA.
In January this year, Israel and the US successfully tested the Arrow-3 in Israel.
The Arrow system, partly funded by the US, was developed and manufactured by the Israeli aerospace company in coordination with Boeing.
The Arrow-3 is expected to be Israel's highest-altitude missile intercept system, according to AFP. Rocket intercept systems at lower altitudes are also available in Israel.
Fox News commented that the Arrow-3, along with Iron Dome, David's Sling and Arrow-2, are a multi-layered shield system of Israel being developed to protect the country from fire from Gaza and Lebanon as well as long-range missiles from Iran.
Since 2015, Iran - Israel's opponent in the region, has continued to develop and test missile systems with the claim of serving only defense purposes.
The Arrow-3 success test information was announced just a few days after Iran successfully tested the Shahab-3 missile - a medium-range ballistic missile capable of flying nearly 1,000km away.
Israel, according to AFP, is one of the most powerful military countries in the Middle East and is considered to have the only nuclear weapon in the region, although Israel has never recognized this possibility.
The latest missile test conducted by the US and Israel took place in the context of tensions between the US and Iran.
