The Iron Dome anti-missile system being developed by Refael, an Israeli military-systems organization, is chugging along. It passed an important milestone last month, is expected to be finally tested sometime soon, and if it passes, full-scale production and deployment will begin. By next summer it may be operative, protecting Sderot and Ashkelon from Hamas rockets, and later on protecting the Galilee from Hezbullah's tender attentions. Add this to the Arrow long-range anti-missile system which is already operative and being upgraded all the time, and Israel is on its way to being protected from what-ever its neighbors will be able to throw at it except mortars and artillery. Mortars either have a very short range (about a mile) or they're large and cumbersome enough, as is all artillery, that drones can identify and destroy them; it's hard to set them up in a school-yard, shoot them off and disappear so quickly the UN personnel can pretend they were never there.
All of which means that each day that passes without rocket attacks brings us closer to the end of that chapter of our relations with our neighbors. They will of course find other ways to attack us, and we'll have to figure out an adequate response etc etc etc. The Palestinians and Hezbullah are very resourceful in such matters; it's in participating in the modern world that they're so dismally inept.
The Arrow anti-ballistic system is a fine thing. If we assume that sometime soon Iran will have nuclear weapons - a reasonable assumption, it seems to me - it will still be useful that they won't know if they have the ability to deliver through our defense systems, while they themselves have no such systems and our nuclear punch is harder. Who knows, maybe five or ten years from now we'll offer our defensive capabilities to the Saudis or the Egyptians or the Germans, heh.
The Iron Dome thing, however, isn't obviously such a fine thing. According to that article, each missile will cost $50,000m, or perhaps less in some scenarios - say, $49,800. A Kassam rocket probably costs $500, and a Katyusha, I'd guess, $2,500. Do the math and you'll see it will be worth the Palestinian's effort simply to get us to shoot Dome missiles in large numbers, for the financial burden. I'm also leery about a defensive strategy that relies completely on technology (I know about technology) rather than deterrence or, even better, the ability to disarm ones' enemies. (The option of making peace doesn't exist).
On the other hand, at the moment it's not obvious what the alternative is. I was in Sderot yesterday, and they've got these concrete mini-shelters strewn all over town; that's clearly not acceptable. Moreover, the law of unexpected consequences could kick in here, too. The Palestinian's most potent weapon agains Israel is the occupation, which is why most Israelis have long since decided to end it. Yet it can't be ended if every time we relinquish control over some territory it immediately becomes a launching pad for missiles against our civilians. Should the Iron Dome system put an end to that tactic, we could go back to the strategy most of us had already agreed upon, of dismantling most settlements and moving back to the barrier. The Palestinians, the Guardian, and Haaretz will continue to squawk that the occupation goes on, but most sensible people will disregard them, and Israel's position will be strengthened in many ways.