WASHINGTON - Rocket-propelled grenades, or RPGs, are a favorite weapon of insurgents in Iraq and Afghanistan. They are cheap, easy to use and deadly.

RPGs have killed nearly 40 Americans in Afghanistan and more than 130 in Iraq, including 21-year-old Pvt. Dennis Miller.

“They were in Ramadi, and his tank was hit with a rocket-propelled grenade,” says Miller’s mother, Kathy. “Little Denny never knew what hit him.”

Sixteen months ago, commanders in Iraq began asking the Pentagon for a new system to counter RPGs and other anti-tank weapons.

Last year, a special Pentagon unit thought it found a solution in Israel — a high-tech system that shoots RPGs out of the sky. But in a five-month exclusive investigation, NBC News has learned from Pentagon sources that that help for U.S. troops is now in serious jeopardy.

The system is called “Trophy,” and it is designed to fit on top of tanks and other armored vehicles like the Stryker now in use in Iraq.

Trophy is the brainchild of Rafael, Israel’s Armament Development Authority, which has conducted more than 400 tests and found that the system has “well above [a] 90 percent” probability of killing RPGs and even more sophisticated anti-tank weapons, according to reserve Col. Didi Ben Yoash, who helped develop the system. Ben Yoash says he is “fully confident” that Trophy can save American lives.

And officials with the Pentagon’s Office of Force Transformation (OFT) agree. OFT officials subjected Trophy to 30 tests and found that it is “more than 98 percent” effective at killing RPGs.

An official involved with those tests told NBC that Trophy “worked in every case. The only anomaly was that in one test, the Trophy round hit the RPG’s tail instead of its head. But according to our test criteria, the system was 30 for 30.”

As a result, OFT decided to buy several Trophies — which cost $300,000-$400,000 each — for battlefield trials on Strykers in Iraq next year.

That plan immediately ran into a roadblock: Strong opposition from the U.S. Army. Why? Pentagon sources tell NBC News that the Army brass considers the Israeli system a threat to an Army program to develop an RPG defense system from scratch.

The $70 million contract for that program had been awarded to an Army favorite, Raytheon. Raytheon’s contract constitutes a small but important part of the Army’s massive modernization program called the Future Combat System (FC, which has been under fire in Congress on account of ballooning costs and what critics say are unorthodox procurement practices.

Col. Donald Kotchman, who heads the Army’s program to develop an RPG defense, acknowledges that Raytheon’s system won’t be ready for fielding until 2011 at the earliest.

In February 2007, the Washington Post reported on the outrageous conditions facing wounded troops at Walter Reed Hospital. Their report stated:

"Signs of neglect are everywhere: mouse droppings, belly-up cockroaches, stained carpets, cheap mattresses."

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