JERUSALEM (Reuters) - Israel's Iron Dome rocket interceptor will allow it to ease off the tinderbox Gaza and Lebanon frontiers, but war risks persist and may even be boosted as Hamas and Hezbollah guerrillas test alternative tactics.
The system's success in shooting down a Palestinian Katyusha salvo last week has been tempered by caveats. Officials want to curb any false hopes of security among Israelis who spent the conflicts of 2006 and 2009 holed up in air raid shelters.
Prime Minister Benjamin Netanyahu hailed Iron Dome as a "breakthrough", but made clear it is not perfect and that Israel continues to rely on overwhelming military might.
"Ultimately, our best defence is a combination of defensive capability and a deterrent offensive capability," he said.
Fenced off in Gaza, Hamas and other Palestinian factions have long looked to rocket and mortar fire as their main weapon against Israel. So has Hezbollah, lacking the armour or aircraft with which to repel Israeli sweeps into southern Lebanon.
Launched into cities and border villages, these rockets have the potential to inflict civilian casualties that, in the past, have triggered major Israeli military mobilisations.
"Our strategy is the same, but Iron Dome will help our decision-making during times of crisis, given the knowledge that some areas have that level of protection," Homefront Defence Minister Matan Vilnai told Reuters.
He said 10 to 15 batteries would be needed to provide full, if not hermetic, coverage of Israel's slim interior. For now, two exist, both stationed outside Gaza. Rolling out the rest would take several years, Vilnai said.
Funding remains hazy given hold-ups in a $205 million grant from the U.S. Congress and Israel's wider defence spending needs in the face of the political upheaval buffeting the Arab world.
According to Israeli sources, at least one foreign client has drafted an order for Iron Dome. The appeal of exporting the system at a mark-up could vie with domestic demand for broader deployment, especially if the current lull in fighting holds.
WEST BANK PRECEDENT?
Might Iron Dome help the quiet evolve into a longer-term entente, as was seen in the occupied West Bank after Israel answered the armed Palestinian revolt there with a long, overland concrete barrier?
Most analysts predict no more than a temporary bolstering of truces, noting that Hamas and Hezbollah, unlike the more secular factions holding sway in the West Bank, are Iranian-backed Islamists ideologically driven to fighting the Jewish state.
"They are not going to let it rest," said Richard Kemp, a retired British army colonel who has studied Israeli combat doctrine on the Gaza Strip and Lebanon fronts. "If this new system is seen to be effective, then Hamas and other extremist groups will do what they can to find other modes of attack."
Kemp served in Iraq, where U.S.-led forces posted the Phalanx anti-mortar system but have suffered more troop losses to roadside bombings and suicide attacks by insurgents.
Israel's guerrilla foes are similarly exploring options.
Hamas fired a guided anti-tank missile at an Israeli bus travelling near the Gaza border last week, after Rafael -- the state arms firm that manufactures Iron Dome -- installed a rocket shield on tanks patrolling the frontier.
The driver and a schoolboy were wounded. Israeli reprisal strikes killed 19 Gazans before Hamas called a ceasefire.
The month before, Israel seized a cargo vessel on the Mediterranean high seas that it said was smuggling advanced Iranian anti-ship missiles to be delivered to Gaza via Egypt.
The Popular Resistance Committees (PRC), a small Palestinian faction that joined Hamas in recent shellings on Israel, said it was studying Iron Dome for flaws that might be exploited.
"Our holy warriors drew useful lessons that can help in defeating it," PRC spokesman Abu Attaya said. "What will they (Israel) do when there is intensive rocket fire, all in one direction and at the same time? It will fail."
Some commentators cautioned that Israelis, buoyed by Iron Dome's success, could themselves lose sight of the diplomatic impasse that has deepened doubts about prospects for peace.
"Israel has surrounded itself with a defensive wall and a lack of hope, while reconciling itself to the adversarial nature of the region we live in," wrote Udi Hirsch in Maariv newspaper.
"At some stage we will understand that the Iron Dome system is a phenomenal tactical victory, behind which lies an ongoing strategic catastrophe."
(Additional reporting by Nidal al-Mughrabi in Gaza; Editing by Mark Heinrich)
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