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updated 11/6/2013 2:43:39 PM ET 2013-11-06T19:43:39

WASHINGTON (Reuters) - The MEADS missile defense system developed by the United States, Italy and Germany intercepted and destroyed two targets simultaneously in a final test on Wednesday before Washington pulls out of the program, Lockheed Martin Corp said.

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Lockheed, which plans to keep working on the project with Germany and Italy, said the test showed the Medium Extended Air Defense System's (MEADS) ability to provide 360-degree protection against air and ballistic missile threats.

MEADS was developed by a joint venture of Lockheed and the Italian-German group MBDA. In Wednesday's test at White Sands Missile Range in New Mexico, MEADS destroyed two targets launched from opposite directions at the same time: a QF-4 air-breathing drone coming from the south, and a Lance missile that was flying a ballistic missile trajectory from the north.

"No fielded ground‐mobile air and missile defense can intercept targets from two directions at the same time, as MEADS did today," said Gregory Kee, who manages the program for the North Atlantic Treaty Organization (NATO).

The United States, Italy and Germany spent about $3.4 billion to develop MEADS over the past decade as a successor to the Patriot missile defense system, but Washington decided last year to withdraw after the development program was completed. It said it could not afford the program because of budget cuts.

Raytheon Co is the prime contractor for the Patriot system, which uses PAC-3 missiles made by Lockheed, and has continued to generate large international orders. Lockheed says MEADS offers broader protection against missile attacks than the older Patriot system, and is cheaper and easier to transport. Officials also say MEADS is the only system that offers 360-degree coverage.

Raytheon officials say the Patriot system, which first entered the U.S. Army's inventory in 1982, has been heavily modernized in recent years, with large foreign orders helping fund the addition of new digital processors, touch panel screens and portable trainers.

Critics of MEADS say it has not been tested in combat, as Patriot has, and the Patriot system has already demonstrated its ability to fire the PAC-3 Missile Segment Enhancement (MSE) missiles developed for MEADS.

The Pentagon put a final $310 million in funding into the MEADS program in fiscal 2013 to pay for the last test and bring the developmental program to a close.

Kee said Wednesday's test, which was observed by military officials from Italy and Germany, would allow all three countries to use the MEADS technology. The Pentagon has said it plans to "harvest" technologies from the MEADS system for other missile defense efforts, but details have not been released.

MEADS said officials from Poland also observed Wednesday's test as they move to launch a competition valued at $3 billion to $5 billion in January for a new air and missile defense system.

(Reporting by Andrea Shalal-Esa; Editing by Grant McCool)

(c) Copyright Thomson Reuters 2013. Check for restrictions at: http://about.reuters.com/fulllegal.asp

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