Israel test-fired a new rocket propulsion system Friday as part of its drive to boost its missile capabilities while the military prepared to retire much of the army's vaunted tank force and several air force squadrons to save $1.9 billion in defense spending in the next five years.

These two events provide a stark illustration of how a new Israeli military doctrine, shaped in part by the economic necessity of cutting defense budgets, is emerging, moving away from conventional warfare to the high-tech, and in most cases long-range, conflicts of the future.

The Defense Ministry announcement of the test firing gave no details of the system involved, but it was likely connected with the development of the Arrow-3 anti-ballistic missile weapon being developed by Israel Aerospace Industries and the Boeing Co. of the United States.

That's intended to be the top tier of a four-layer missile defense shield, able to destroy incoming ballistic missiles -- think Iran's Shehab-3b or upcoming Sejjil-2 systems -- outside Earth's atmosphere.

The test might also have involved Israel's Jericho 3 ballistic missile, which the Times of Israel newspaper says has a reported range of 6,000 miles.

That's capable of hitting most of Iran in what Israeli strategists say would be a retaliatory strike for any missile bombardment of the Jewish state.

There's no public debate about Jericho-3 being used in a first, offensive strike.

Friday's test was carried out at the Palmachim air force base on the Mediterranean coast south of Tel Aviv. The military test-fired an unidentified long-range missile there, generally believed to be a Jericho-3, in November 2011.

Funding for the development of the Arrow-3 largely comes from the United States and is separate from the annual $3.1 billion in military aid Israel receives from Washington.

So these missile tests are largely unaffected by Israel's defense budget, which is being subjected to hefty cutbacks because of economic constraints and political pressure for greater spending on social programs.

Israel's military strategists say missile defenses are now of critical importance because the greatest danger the Jewish state faces is Iran's growing ballistic missile force in tandem with Tehran's supposed nuclear weapons program, aimed, it is feared, at developing nuclear warheads that could obliterate Israel with only one or two hits.

The Israelis say any Iranian missile attack would be accompanied by other strikes involving tens of thousands of short- and medium-range missiles held by Syria, Palestinian militants and the Iranian-backed Hezbollah in Lebanon.

That could mean a sustained barrage lasting weeks, aimed at overwhelming Israeli missile defenses and pounding its cities and towns in an unprecedented assault.

So it's no surprise Israeli commanders, faced with no credible conventional military threat from their Arab neighbors, have decided to meet a massive national budget deficit by reducing the country's conventional forces.

The proposed cuts unveiled Wednesday, which still need to be approved by Prime Minister Binyamin Netanyahu's cabinet, focus primarily on shedding units now considered redundant and reorganizing its forces to counter new challenges.

Eitan Shamir of Bar-Ilan University's Begin-Sadat Center for Strategic Studies said the cutbacks will include abandoning older tanks like the 700 aging Patton M60A1/3 still in the army's inventory and its M109 artillery guns.

Roni Daniel, military analyst with Channel 2 television, described the military's plans as "a reform unlike any other since the army's inception" in the 1940s.

That's true up to a point, but Israel's military chiefs have been moving toward this point, away from the big battalions and classic maneuver warfare to the high-tech weapons systems, including cyberweapons, as doctrine has kept pace with technological advances by Israel's enemies.

Defense Minister Moshe Yaalon acknowledged the changing threat environment, which now includes cyberwarfare, in a country that has fought seven major wars since 1948.

"The army versus army conflicts that we last saw 40 years ago" in the 1973 Middle east war "are becoming less and less relevant," he said Thursday.

"The foreseeable future is leading us to battles which will be determined by superior Israeli military technology, in the air, land and sea, with less heavy tools and through more and increasing use of sophisticated and unmanned technology, which gives us a significant advantage over any enemy."