JERUSALEM, Aug 7 (Reuters) - Israel's Iron Dome interceptor has shot down 97% of Palestinian rockets it has engaged during the weekend surge of Gaza fighting, the military said, an improvement in the performance of the U.S.-backed system.

First fielded in 2011, Iron Dome - which launches guided missiles to hit incoming rockets and other short-range threats mid-air - was rated as 85% successful by Israeli and U.S. defence officials. That increased to 90% in a Gaza war of 2012.

Made by state-owned Rafael Advanced Defense Systems Ltd with support from U.S. firm Raytheon Technologies Corp, Iron Dome is designed to economise on costly interceptor missiles by engaging only rockets that are on a trajectory to hit populated areas.

It has intercepted 97% of these during a flare-up of fighting with Palestinian Islamic Jihad militants in Gaza since Friday, an Israeli military spokesperson said, describing it as the system's best performance so far.

"We are improving our capabilities all of the time," the spokesperson said. "Touch wood."

Islamic Jihad has fired 580 rockets at Israel as of Sunday morning, the spokesman said, adding that around 20% fell short within Gaza while the rest had reached as far as the outskirts of Tel Aviv and Jerusalem.