WASHINGTON (Reuters) - A test of a missile defense system successfully intercepted a ballistic target, the U.S. military said on Saturday, a boost to development of an anti-missile shield program.

The hit by the Lockheed Martin Corp.-built Terminal High Altitude Area Defense (THAAD) program was the fourth in as many tests and involved intercepting the missile outside the Earth's atmosphere, the U.S. Missile Defense Agency said.

The THAAD is designed to defend troops, population centers and critical facilities against short- to medium-range ballistic missiles of a type that could be fired by Iran or North Korea. The system could also be sold to U.S. allies like Israel.

Military representatives from Israel, Australia and the United Arab Emirates observed the test conducted off the island of Kauai in Hawaii, said Riki Ellison, who heads a missile defense advocacy group funded in part by military contractors.

The test conducted late Friday evening was designed to show how the radar, launcher, fire control equipment and procedures of the system worked together, as well as the interceptor detecting and destroying the target using only the force of the collision.

The system is a part of a broader U.S. anti-missile shield and is the only one able to engage targets in or outside the atmosphere.