Israel Aerospace Industries developed the Arrow-2 system with American funding for the Israeli Air Force Lockheed Martin developed the THAAD for the US Army
Although Arrow's development wasn't always smooth and the system experienced failures in tests THAAD's development was slower due to more numerous failures Consequently, Arrow was delivered to the Israeli Air Force in 1998 and entered service in 2000 while THAAD only entered service in 2008
Although they are designed to operate against similar targets, they differ greatly in their method of operation and cost
The Israelis developed a missile that hits near the target and destroys it with a stream of hot metal fragments
The Americans insisted on "Hit to Kill"—a direct hit on the target This approach requires greater precision in tracking the target and maneuvering the missile but eliminates the need for a warhead
Israel Aerospace Industries used direct hits only with Arrow-3 which intercepts its target in space where an explosion is meaningless and only metal-to-metal contact can destroy the target
Both systems reach similar and enormous speeds of 9,000-10,000 km/h
Additionally, the American system is lighter, allowing it to be transported by cargo planes to combat zones The Arrow is heavier as it was designed to protect Israel from fixed bases or while being towed by trucks to new sites
For the defense of US territory itself, other larger and even more expensive interceptors were developed to deal with intercontinental missiles from Russia and North Korea