The towns of Dimona and Arad were hit on Saturday evening, with the former widely believed to hold Israel's undeclared nuclear arsenal.

Most of the wounded were injured by shrapnel or while rushing to shelters, Israeli first responders said.

Several buildings were also damaged in the strikes.

Israeli financial daily and website Calcalist first reported that it was David's Sling, a key component of Israel's multi-layered air defence shield, that had failed to intercept the incoming Iranian ballistic missiles.

Contacted by AFP, the Israeli military confirmed that it was David's Sling, named after the Biblical figure who slew Goliath, that had malfunctioned.

Operational since April 2017, the aerial defence system was originally designed to counter heavy rockets and cruise missiles.

Long-range ballistic missiles of the kind fired by Iran are typically handled by the Arrow system, which intercepts targets outside the atmosphere, while shorter-range threats fall to the Iron Dome and the newly deployed Iron Beam laser system.

Calcalist reported that the military chose to use David's Sling on Saturday following a recent upgrade in a bid to preserve Arrow interceptor stocks amid concerns the war with Iran could drag on.

On February 11, the defence ministry announced that David's Sling had successfully completed a series of tests as part of what it described as a "future threat readiness upgrade".

The war with Iran began on February 28.

Yoav Tourgeman, chief executive of Rafael, the system's main contractor, was quoted as saying that the upgraded version "incorporated new capabilities across a wide range of challenging scenarios".

Despite Saturday's failed interceptions, the military has stressed that its forces have intercepted about 92 percent of the more than 400 ballistic missiles fired by Iran since the start of the war.

Military spokesman Lieutenant Colonel Nadav Shoshani said on Sunday that there had been only four direct hits on Israeli territory since the Iran war began.

The Middle East was sparked by joint US-Israeli strikes on Iran that triggered a wave of retaliatory missile and drone attacks against Israel and several other countries in the region.