Greece in talks with Israel to develop 2 billion euro 'Iron Dome'

Greece is in talks with Israel to develop a 2 billion euro ($2.11 billion) anti-aircraft and missile defence dome, part of a wider push to modernise its armed forces as it recovers from a protracted debt crisis, Greek officials said on Thursday.

The defences would likely mimic Israel's Iron Dome and other systems that intercept short- and long-range missiles launched during strikes from its neighbours amid the ongoing conflicts in Gaza and Lebanon.

Greece is keen to invest in its defences to keep up with its NATO ally and historic rival Turkey, which is also developing its own air defences, despite some improvement in relations.

"The plan is to create a multi-layer anti-aircraft and anti-drone system," one source with knowledge of the issue told Reuters after a closed door briefing with Greek Defence Minister Nikos Dendias.

"We are in discussions with Israel," the source said.

A second official confirmed the scale of the potential deal, adding that Greece needs to spend 12.8 billion euros by 2035 to modernise its armed forces.

The air defences are part of Athens' 10-year military purchasing plan that includes acquiring up to 40 new F-35 fighter jets and drones from the U.S., and four Belharra frigates and Rafale jets from France.

"Our effort is for a quick transition of our armed forces to the 21st century," Defence Minister Dendias said before the Thursday briefing.

Greece currently uses U.S. Patriot and old Russian S-300 systems to protect its airspace.

Despite some thaw in Greece's long-troubled relations with Turkey, its much larger eastern neighbour, the two countries remain at odds on a range of issues including sea boundaries, energy resources and airspace in the eastern Mediterranean.

($1 = 0.9481 euros)