Israel and the UAE formalised relations last year, brought closer by commercial interests and concern over Iran.
State-owned IA, a major Israeli defence firm, said in a statement that the companies will develop a Counter-Unmanned Aircraft System "tailored to the UAE market, with wider ranging benefits for the MENA region and beyond".
Yemen's Iran-aligned Houthi movement, which recently stepped up cross-border missile and drone attacks on Saudi Arabia, has in the past threatened to launch strikes on the UAE.
The UAE had been Riyadh's main partner in the Saudi-led military coalition that intervened in Yemen in March 2015 against the group, but a senior Emirati official said in February that it had ended its military involvement in Yemen last October.
The war has been in a military stalemate for years and in 2019 the UAE scaled down its presence in Yemen following attacks that year on tankers in Gulf waters, including off its shores.
The UAE already has an advanced anti-missile interception system, the U.S. Terminal High Altitude Area Defences (THAAD).
EDGE, tasked with supplying advanced weapons to the UAE armed forces, is focused on developing drones, unmanned vehicles, smart weapons and electronic warfare equipment rather than conventional weaponry.
(Writing by Dan Williams and Ghaida Ghantous; Editing by Alexander Smith and Jan Harvey)