Israel's new Iron Dome mobile short-range missile defence system was used in a combat operation for the first time on Thursday, Israeli officials say.
A battery located near the southern coastal town of Ashkelon brought down what was thought to be a Grad rocket fired from the Gaza Strip.
Iron Dome was conceived in the wake of the 2006 Lebanon war, which highlighted the vulnerability of Israeli population centres to long-range missile and rocket attack.
The system is manufactured by the Israeli company, Rafael Advanced Defense Systems, though much of the funding may well come from US military aid.
It is based on three elements - a detection and tracking radar, a battle management and control system, and the missile firing units themselves.
The manufacturers claim to be able to hit anything from a missile to a 155mm artillery shell in all weathers.
Almost from the outset there was as much a political as a military rationale to the project.
People living in southern Israel have exerted huge pressure on successive governments to do something to defend them against missile attack.
That is exactly what happened in this case.
After some three weeks of tensions and cross-border attacks by both sides, the Israeli government was compelled to deploy the Iron Dome system even though it was just out of its testing phase.
The weaponry available to Palestinian militants has been improving over the years, increasing in range and carrying heavier warheads.
The Grad - two of which were reportedly fired yesterday - has a range of some 20km (12 miles), easily bringing a town like Ashkelon within range.
Israeli reports say the Iron Dome battery's radar determined that one of the missiles was going to land in an open area so it only engaged the other one.
However, the Palestinians also have much longer-range, Iranian-designed Fajr-3 missiles - though how many have been smuggled into Gaza is uncertain.
These have a range of about 45km (28 miles) and are capable of reaching much more densely populated areas.
At first sight, this engagement by the Iron Dome system appears to be a game-changer in the struggle between the Israelis and armed Palestinian groups in Gaza.
The Israelis have tried various means, ranging from air strikes to a full-scale ground operation to re-enter the Gaza Strip, but none of these efforts have permanently halted the rocket fire.
Indeed the major incursion - Operation Cast Lead, which began in December 2008 and ended in January 2009 - prompted considerable international criticism of Israel owing to the heavy casualties among Palestinian civilians.
Iron Dome represents a different approach to the missile threat.
Two batteries are operational now. Israeli planners say that up to 13 batteries may be necessary.
It is a very expensive system - each interceptor missile costing some $70,000 (£43,000) a shot.
Compared with the technology used by the Palestinians, it is like tossing an expensive BMW car into the air to knock down a basic Ford.
This is not to minimise the missile threat, which is real. But there is a debate among Israeli commentators about the whole approach to Gaza.
Offensive operations and defensive technology like Iron Dome may well have a part to play. But political management is also important.
Israel's own actions, some commentators say, may well have contributed to the recent upsurge in tensions along the border.
But there are many both in and outside the region who argue that unless something is done to address the peculiar semi-isolation of the Gaza Strip and its population, the periodic cross-border flare-ups will continue.
Thursday's firing of an anti-tank missile against an Israeli school bus has again prompted a strong Israeli response, with reports that a number of Palestinian civilians have been killed in air strikes.
Military and technological measures only tackle the symptoms of the problem.
As so often in the region, it is the underlying political situation that is the real issue. And this looks to be as intractable as ever.