By Dan Williams

JERUSALEM, Oct 10 (Reuters) - Israel will replace the flare-firing systems it has installed on some of its passenger planes to defend against missile attacks with non-pyrotechnic lasers deemed safer abroad, officials said on Wednesday.

An Israeli airliner narrowly escaped being shot down by al Qaeda over Kenya in 2003, prompting state-owned Israel Aerospace Industries (IAI) to develop Flight Guard, a device that detects heat-seeking missiles and diverts them with flares.

Flight Guard has been placed aboard a number of Israel El Al Airlines jets. But officials said some foreign states voiced concern at the prospect of fire risk if the flares were deployed over their territory.

Prime Minister Ehud Olmert's security cabinet said in a statement that development would start on a new system to replace the current one at the start of next year.

Officials said the new Israeli system, developed by El-Op, a subsidiary of Elbit Systems Ltd., will use a laser to "blind" the heat-seekers in shoulder-fired missiles. "Work on the system began three years ago, specifically for helicopters. Adapting it for bigger aircraft, for planes, will, to all appearances, take another two years," El-Op deputy director Yisrael Anschel told Israel's Army Radio.

A security source said the El-Op system is provisionally called MUSIC (Multi-Spectral Counter MANPADS System) and that its broad-array laser can "take on 1,000 threats at once".

"It knocks the missile out of the sky, which carries none of the risks of a pyrotechnic system," the source said.

Flight Guard will remain on some Israeli passenger planes even after the new system is phased in, security officials said.

Elta, the IAI subsidiary that produced Flight Guard along with state-owned Israel Military Industries, disputed assessments that the flare system is a potential fire hazard.

(Additional reporting by Avida Landau in Jerusalem)

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