As part of the current memorandum of understanding, the US invests $3.3 billion annually in military aid to Israel but in the operation against Iran, US assistance reached an especially high amount. According to the “Bulgarian Military” website, during the 12 days of fighting between Israel and Iran, the US has launched about 15%-20% of all THAAD system interceptors in the world against Iranian ballistic missiles, costing more than $800 million.
THAAD was developed by Lockheed Martin. The system is designed to intercept ballistic missiles, and directly hits threats to intercept them (Hit to Kill). THAAD is unique in its design to intercept the missiles in the terminal phase, usually at altitudes of 40-150 km, using an advanced radar from Raytheon. Each THAAD battery has 6-8 launchers, with eight interceptors in each.
The US system has maneuvering capabilities, similar to Israel’s David’s Sling, which is designed for mid-range threats, with THAAD able to track up to seven targets at once. In Israel, THAAD is designed to provide protection against the extensive barrages launched by the Iranians. When identifying threats with radar, the Israeli air defense system examines its type, speed and height, and according to all of these – one of the systems is activated.
The main disadvantage of the THAAD system
Two THAAD batteries have been deployed in Israel by the US. The first battery arrived in October 2024 and the second in April 2025, and their operation, including the cost, is the responsibility of the US. The Americans arrived in Israel with a system that has already proven itself at the operational level, with the first interception on January 17, 2022 of a ballistic missile launched by the Houthi rebels in Yemen against the UAE, but the scale of the interceptions in Israel’s operation against Iran does not come close to what THAAD had previously handled.
The main disadvantage of THAAD, similar to other US systems, is the extremely high armament costs. Each THAAD US interceptor missile costs about $12.7 million, according to the budget of the US Missile Defense Agency (MDA), much more than the Israeli Arrow 3 (about $2 million) or Arrow 2 (about $1.5 million). A comparison between other Israeli and US systems demonstrates similar results. While a David Sling interceptor missile costs an estimated $700,000, the cost of intercepting a Patriot PAC-3 system is about $6 million. This system was the basis of US defense at the Al-Udeid base in Qatar last week, where, according to “Defense News”, two Patriot batteries with about 44 soldiers – the oldest of whom is a 28-year-old captain – operated the mission to intercept about 14 Iranian ballistic missiles.
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85%-90% interception rate
Data from the Institute for National Security Studies shows that Iran launched about 591 ballistic missiles at Israel over 12 days, with Israeli and US defense systems intercepting about 85%-90% – a higher rate than expected before the war. Of these, about 60-80 interceptions were carried out by THAAD, according to “Bulgarian Military.” Usually, the asymmetric investment between attack costs and interception costs, refers to drones. However, this issue is also reflected in the field of ballistic missiles, especially in the case of US systems. THAAD, with a price tag of about $12-15 million per interceptor, has faced ballistic missiles whose prices range from about $100,000 for relatively old models such as the Fateh-110 to about $1 million for advanced models such as the Sejil or Khorramshahr.
In summary, the deployment of THAAD in Israel may provide a challenge to the Trump administration for two reasons: economic and operational. In the economic sphere, the Department of Defense last week presented its budget request for fiscal year 2026, which stands at about $961.6 billion. That amount includes, among other things, $205 billion for procurement, $107 billion for operation and maintenance, and $1.2 billion for R&D. In the longer term, the Pentagon budget is expected to cross the trillion-dollar mark by 2027. As the US is required to invest more in operational use of its interceptors, which are already relatively expensive, the investment will increase.
At the same time, the US is deployed all over the world. When the THAAD system was developed in the 1990s, it was aimed at the Iranian ballistic missile threat, but also at that of North Korea. Today, the Chinese DF-21D and DF-26 missiles are also on the agenda, and as Beijing’s threat to Taiwan increases and tensions between Pyongyang and Seoul increase, it is possible that the top brass of the Pentagon will wonder whether there is a need to reinforce air defense systems in the East Asia.
Published by Globes, Israel business news – en.globes.co.il – on June 30, 2025.
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