Will Israel's "Iron Dome" help bring peace?

The following script is from "Iron Dome" which aired on Feb. 17, 2013. Bob Simon is the correspondent. Andy Court, producer.

Iron Dome is a technological marvel, a cutting-edge weapon of war that even some pacifists might come to love. Instead of killing people, Iron Dome saves them -- by intercepting rockets loaded with explosives before they can land on innocent civilians. And it does all this in less time than we've just spent explaining it. The system was developed by Israel, with hundreds of millions of dollars of support from U.S. taxpayers. It's been called "a game-changer," that might relieve military pressure on Israel and make it easier to achieve peace in the Middle East -- and that was something we decided we had to see for ourselves.

Over the past 11 years, more than 15,000 rockets and mortars have been fired at Israel by Hezbollah in Lebanon, and by Hamas in the Gaza strip. Until recently, the only thing Israeli civilians could do was run for cover but in the latest round of fighting between Israel and Hamas late last year, some people stopped running and tried to get some good pictures because this time when Hamas fired rockets from Gaza at Israeli cities, Iron Dome fired missiles to intercept them in the sky before they could do any damage on the ground. You're looking at an Iron Dome missile on its way. You can't see the Hamas rocket it's going after, but watch how the missile will adjust its course to get close to the Hamas rocket and blow it up.

At night, the images of Iron Dome are even more spectacular. This video was taken at a wedding in southern Israel. As squadrons of Iron Dome missiles could be seen hunting salvos of Hamas rockets, the wedding music played on despite the battle above.

Bob Simon: Do you think that people in Tel Aviv and Ashkelon feel safer today than they did six months ago?

Ehud Barak: By far.

Ehud Barak is a legendary Israeli commander and general and Israel's defense minister. We interviewed him just before Israel's recent elections.

Bob Simon: Now, people are not running to shelters so much? They're staying in their cafes--

Ehud Barak: No. I don't think so. Probably some-- probably in Tel Aviv where no rocket actually landed. But there is less anxiety deep in their minds. Because after all, everyone knows the statistics that basically, most probably, the incoming rocket will be intercepted.

It really looked like Israel was in for it in November when Israelis leaders, fed up with rocket attacks from Gaza, assassinated Hamas' military commander. Hamas and Islamic jihad responded by firing more than 1,500 rockets at Israel. The Israeli Air Force says Iron Dome destroyed 85 percent of the rockets headed towards Israeli towns and cities. There's no way to independently confirm that figure, but the fact that Iron Dome could shoot down a short-range rocket travelling between 500 and 1,000 miles per hour is remarkable in itself. It's like a bullet shooting down another bullet which is why, when Iron Dome was just a concept on a drawing board several years ago, many Israeli strategists didn't think it could be done.

Ehud Barak: It sounded extremely dramatic, to make two bodies meet together when both of their relative velocities are immense.

Bob Simon: We understand that it-- again, even the Israeli Air Force was against it?

Ehud Barak: Yeah. There were many, many corners of resistance. Because people didn't see it as natural.

To see how Iron Dome works, we paid a visit to one of Israel's five operational batteries. Each battery has its own radar, command-and-control center, and launchers that fire the intercepting missiles. The equipment's worth about $50 million. It's sitting in a potato field, manned by what appear to be college kids. Shai Kogensky is the battery commander.

Bob Simon: How old are most of your soldiers?

Shai Kogentsky: Between 18 to 21 years old.

Bob Simon: That's pretty young.

Shai Kogensky: Yes, yeah.

Bob Simon: And you're the commander?

Shai Kogensky: I'm the commander. I am 32.

Bob Simon: You're 32.

Shai Kogensky: Yeah.

Bob Simon: So you're the old man here.

Shai Kogensky: Yes, I'm the old man.

When Hamas launches a rocket, Iron Dome's radar detects it, and its computers calculate where it will land. If it's headed for an empty field, Iron Dome won't waste an interceptor on it. But if it's going towards a populated area, the system will figure out the best place to intercept the rocket, so that the falling shrapnel won't do any harm. Iron Dome will then ask one of those kids for permission to fire.

Bob Simon: So you've got three-to-five seconds to decide--

Shai Kogensky: Yes, because--

Bob Simon: --whether or not to intercept it. It-- and you have to do something. The soldier has to do something. It will not be automatic.

Shai Kogensky: No, no, no, it's not automatic. The soldiers are intercepting the rockets. They have to make a decision.

Bob Simon: This is the Iron Dome interceptor. Once it's launched, it has a mind of its own, and this is the mind right here -- the brains. It guides the missile very close to the enemy rocket and explodes, blowing the rocket out of the sky and keeping it far away from an Israeli town.

A rocket fired from the Gaza strip will take just seven to 15 seconds to land in the Israeli town of Sderot. The Israelis say Iron Dome has knocked down many of those rockets.

The rocket scientists who invented iron dome can't -- for security reasons -- show their faces on camera. But Didi Ya'ari, the CEO of Rafael, the lead manufacturer of the system, is under no such restriction.

As he showed us what the inside of an Iron Dome command center looks like, he told us more fire was directed at southern Israel during the eight-day battle in November than during all of Israel's previous wars.

Bob Simon: People have called the development of the Iron Dome a "game changer." Does that mean anything?

Didi Ya'ari: It does. Definitely. You know, people go to work. Harbors are working. Cars are moving, trains are moving. Nothing stops. And still, you have circumstances where in the past you would consider as full war.

Israel was ready for full war. Seventy-five thousand soldiers and hundreds of armored vehicles were called up ready for an invasion of Gaza. It didn't happen.

BOB SIMON: Is it because of Iron Dome that the Army didn't have to invade Gaza?

Didi Ya'ari: By all means without Iron Dome we'll-- we were inside Gaza, you know, after two days.

Bob Simon: And the casualties on both sides would have been higher?

Didi Ya'ari: Yeah.

While Iron Dome worked well against Hamas's rockets, no one knows how it would do in the North, against Hezbollah's larger, more sophisticated arsenal. And there's expense. Each Iron Dome interceptor is believed to cost more than $75,000. A Hamas rocket can be built for as little as $500.

Bob Simon: What if the next time around, Hamas fires a hundred at once, or 500, and half of them are--

Ehud Barak: I don't want to go into extremely kind of-- extreme kind of scenarios. But basically, that was a question mark that was raised by critics, "How come that you're launching something that might cost $50,000 or $100,000 against something that costs $500 or $5,000 dollars?" And I say, that's not the right way to look into it. Basically there is high price that I put on our capacity to run normal life, to let the people live as normally as possible, to let the economy flourish and move forward.

Barak argues that if Iron Dome makes Israelis feel more secure, less threatened, they'll be more willing to make peace with the Palestinians. You wont find many Palestinians who agree.

Husam Zomlot: Before the Iron Dome, they felt no pressure to make any concessions. After the Iron Dome, they will feel the pressure to make concessions? Of course not.

Husam Zomlot is a PLO diplomat and a professor at Bir Zeit University.

Bob Simon: What's this demonstration here?

As we walked with him through the streets of Ramallah on the West Bank, a group of protesters marched right past us.

Husam Zomlot: Certainly it will not be the Iron Dome.

Bob Simon: Right.

Husam Zomlot: This will not be the area, you know, of security. It might be about prisoners. Most likely it is about prisoners.

It was about prisoners -- Palestinians arrested by the Israelis. People here have many complaints about their political and economic situation, but unlike Hamas in Gaza, the Palestinian authority on the West Bank hasn't fired any rockets at Israel and has been praised by Israeli officials for maintaining law and order. But a more peaceful situation in the West Bank hasn't led to renewed peace talks, and each side blames the other for the gridlock.

Husam Zomlot: Life is very normal in Tel Aviv. People are jogging on the beaches of Tel Aviv. There is a wall that's separating from whatever happening there. It doesn't concern them whatsoever. And this is the dynamics we are faced with. The reality is, until the Israeli society feels some sort of a sense of crisis, a sense of an urgency, we will go nowhere.

Bob Simon: Surely, you're not suggesting that it would be better if rockets fell on Tel Aviv, or are you?

Husam Zomlot: Absolutely not. I think the U.S. should tell them that our money comes with our advice. "If you take our money, you better take our advice. For the last 25 years, you have been taking only our money and putting our advice aside.

The $270 million the U.S. has provided Israel to help build Iron Dome is in addition to the three billion dollars Israel gets annually from the U.S. in military aid. Palestinians complain that while all this U.S. support is being given to Israel, the Israeli government has repeatedly defied U.S. policy and approved the construction of new settlement blocks in the West Bank.

Bob Simon: The Americans have already given $270 million dollars.

Ehud Barak: More than this, I believe, along the, yeah.

Bob Simon: And they're promising just the Iron Dome another $660 million--

Ehud Barak: Yeah. Yeah. $680-- probably $211 might be given in the coming fiscal year.

Bob Simon: While the Americans are helping you so much in your defense. Israel goes on building settlements, which is exactly what the Americans don't want. How does that work, when you're asking America for help and doing exactly what the Americans don't want you to do?

Ehud Barak: You know, Bob, I prefer not to answer this question right now. You know, we are in the height of the election period. I basically think that the relationship, especially between our intelligence communities and our defense establishment, is extreme-- are extremely close.

Bob Simon: You mean, between the Israelis and the Americans?

Ehud Barak: Yeah. Extremely close. And of course, we have certain differences.

Bob Simon: But how does it work? I mean, right now, Israel has just announced the building of a gigantic settlement project. This is at the same time that the Americans are providing the money for Israel's most important defense system.

Ehud Barak: You know, we are highly grateful to the administration, to American people as a whole for this support. I don't think that it's relevant to the issue of Iron Dome.

Israelis argue that America's commitment to their security must be kept separate from political disagreements between the U.S. and Israel.

Six Israelis were killed in this latest battle with Hamas. The UN says more than a hundred Palestinians perished as the Israeli Air Force and Navy pummeled targets in Gaza . But Hamas never surrendered. Despite Iron Dome, it kept firing rockets, and after a cease fire was negotiated, Hamas' long-exiled leader made a triumphant visit to Gaza, claiming victory. So who won? Depends who you ask. The loser, again, is any prospect of peace, and no machine, however brilliantly designed, can fix that.