JERUSALEM - Israel's upgraded Arrow ballistic missile shield failed its first live interception test on Tuesday, security sources said, a fresh setback for the US-supported system billed as a bulwark against Iran.

Operators of the Arrow 3 battery at Palmahim air base on the Mediterranean coast cancelled the launch of its interceptor missile after it failed to lock on to a target missile fired over the Mediterranean, the sources said.

"There was a countdown to the launch, and then nothing happened," one source told Reuters on condition of anonymity. "A decision was made not to waste the interceptor missile."

Arrow is among several elements of an integrated Israeli aerial shield built up to withstand potential future missile and rocket attacks by Iran, Syria or their guerrilla allies in Lebanon and Gaza.

In a statement, Israel's Defence Ministry said that "within the framework of preparations for a future interception test, a target missile was launched and carried out its trajectory successfully".

Asked whether Tuesday's trial had been intended as a full interception that had failed, a Defence Ministry spokesman had no immediate comment.

Arrow 3 interceptors are designed to fly above the earth's atmosphere, where their warheads detach to become kamikaze satellites, or "kill vehicles", that track and slam into the targets. Such high-altitude shoot-downs are meant to safely destroy incoming nuclear, biological or chemical missiles.

Arrow is jointly developed by state-owned Israel Aerospace Industries (IAI) and US firm Boeing Co. Its earlier version, Arrow 2, was deployed more than a decade ago and officials put its success rate in trials at around 90 percent.

But an Arrow 2 interception test on Sept 9 ended inconclusively, according to the Defence Ministry. The US journal Defense News later reported that the Arrow 2 interceptor missile missed its target.