Israel says its unique "Iron Dome" short-range air defence system is performing well, intercepting the vast majority of rockets fired at southern cities in the latest barrage by Gaza militants.

So far three experimental batteries have been deployed since March 2011 -- around Ashkelon, Ashdod and the Negev desert capital of Beersheva, which have a combined population of more than half a million.

Experts say that a total of 13 batteries are needed to give a full nationwide umbrella.

By Monday afternoon, Palestinians had fired more than 200 rockets and mortar rounds from Gaza into southern Israel since a latest round of fighting erupted on Friday, the military said.

Gaza emergency services said that at least 23 Palestinians had been killed and 73 wounded since Friday as Israeli launched 36 air strikes against the territory.

On Monday, 31 rockets headed for urban centres were targeted by Iron Dome, which scored 23 hits, the military said, a 75 percent success rate.

"The system is working very well," Brigadier General Doron Gavish briefed reporters at one of the batteries in the vicinity of Ashdod, 25 kilometres (15 miles) from the Gaza border.

"Rockets shot at the cities of Israel are being intercepted by the warriors who are operating the system," said Gavish head of Israel's national air defences.

Visiting a battery on Sunday, Prime Minister Benjamin Netanyahu spoke of the system's "impressive achievements."

"You are doing exceptional work," he told its crew. "I take the Israeli peoples hat off to you."

The system, the first of its kind in the world, was developed by Israel's Rafael Advanced Defence Systems with the help of US funding. It is designed to intercept rockets and artillery shells fired from a range of between four and 70 kilometres (three and 45 miles).

Each battery comprises detection and tracking radar, state-of-the-art fire control software and three launchers, each with 20 interceptor missiles, military sources said.

Militants in Gaza and Lebanon's Hezbollah militia have fired thousands of rockets at Israel in the past.

The first batteries were deployed facing the Hamas-run Gaza Strip, from where militants have repeatedly fired improvised rockets, prompting Israel to launch a devastating 22-day offensive into the territory in December 2008.

It is later to be deployed along the Lebanese border, from where Hezbollah militants fired some 4,000 rockets into northern Israel during a 2006 war. It was that experience which prompted the development of Iron Dome.

Israel believes Hezbollah now has an arsenal of some 40,000 rockets.

But a complete deployment is expected to take several years.

Iron Dome joins the Arrow missile defence system in an ambitious multi-layered programme to protect Israeli cities from rockets fired from Gaza or Lebanon, or missiles fired from Iran or Syria.

"It is a new tool being brought into the basket of tools... a tool we didn't have before," Gavish said.

"We have something new in the arena that obviously plays in our favour."

The defence ministry says a third system, known as David's Sling, is currently being developed with the aim of countering medium-range missiles.