JERUSALEM - Israel's defence ministry said on Monday it had signed a 2 billion shekel ($536-million) deal with local contractors to expand production of a new laser-based missile defence system that could be operational in the next year.

       The deal signed with state-owned Rafael Advanced Defense Systems and Elbit Systems is for a high-power laser called Iron Beam that is designed to counter aerial threats, including rockets, mortar bombs, drones and cruise missiles.

       It will supplement the Iron Dome system, which shoots down rockets and missiles fired at Israel, using radar-guided missiles to blow up short-range threats.

       Eyal Zamir, the director general of Israel's defence ministry, said the Iron Beam deal "heralds the beginning of a new era in warfare."

       Iron Beam is seen by experts as a much cheaper alternative for neutralising enemy rockets and drones than the interceptor missiles Israel currently uses. REUTERS