The 16-day defence drill involves 2,000 troops from the US European Command and the Israeli army. It will put the Israeli Arrow missile defence system and three US systems through their paces.
Testing the Terminal High Altitude Area Defence, the ship-based Aegis Ballistic Missile Defence System and Patriot anti-aircraft systems has required Washington to dispatch 17 warships to the region.
Monitoring from the Negev desert, the US-made Forward Based X-band Tactical radar - capable of detecting long-range missiles - will track the Arrow missile system while transmitting data to a US joint tactical ground station.
The war games come as Susan Rice, the US ambassador to the United Nations, called for an end to "anti-Israel vitriol" at the United Nations.
"Member states must once and for all replace anti-Israeli vitriol with recognition of Israel's legitimacy and right to exist in peace and security," she said at a conference in Jerusalem organised by Shimon Peres, the Israeli president .
She also stressed Washington's commitment to fighting extremism.