The US government, which has faced a slew of cyber attacks in recent months, has gone on the offensive by working on National Cyber Range project, a platform that will function as a test-bed for cutting-edge cyber defense technologies and help train cyber warriors.

The Department of Defense has allocated over $500 million to develop cyber technologies that will allow researchers to simulate attacks by foreign powers and from hackers based inside the US and the national Cyber Range is expected to launch by mid-2012.

Several companies, including defense contractor Lockheed Martin and universities such as Johns Hopkins University in Baltimore, are working on prototypes of the virtual firing range. One of their prototypes will be selected to go into operation later in the year.

According to Eric Mazzacone, spokesman for the Defense Advance Research Projects Agency (DARPA), which was also involved in early network research that led to the birth of the Internet, the in-house controllable mini-Internet would allow researchers to carry-out experiments in days rather than the weeks it currently takes and unlike the real Internet, it can be wiped or reset between tests.

Agrees White House cybersecurity coordinator Howard Schmidt. We're far better prepared than we've ever been before, Schmidt told Reuters in an interview.

In recent years, several cyber attacks have been launched on US soil, targeting government agencies as well as private companies.

In 2008, the worst cyber attack against the US military occurred when a malicious worm called agent.btz on a flash drive infected the military network. [F]or all the military capability that information technology enables, it also introduces vulnerabilities. We learned this lesson in 2008 when a foreign intelligence agency used a thumb drive to penetrate our classified computer systems—something we thought was impossible. It was our worst fear: a rogue program operating silently on our system, poised to deliver operational plans into the hands of an enemy, said Deputy Secretary of Defense William J. Lynn, in his address at the 28th Annual International Workshop on Global Security on Thursday.

In May 2009, President Barack Obama declared cyber attacks as one of the most serious challenges facing the country and since then the government has witnessed several attacks by hackers. In recent months, the networks of the US Senate, the CIA and the FBI were breached but the security holes were plugged before classified information could be stolen.

Lockheed Martin, which is working on the National Cyber Range project, itself became the victim of a cyber attack in May 2011.

Earlier this month, the Pentagon said it would publish proposals to categorize cyber attacks as acts of war even as the White House said the government would respond to hostile acts in cyberspace as we would to any other threat to our country.

We reserve the right to use all necessary means - diplomatic, informational, military, and economic - as appropriate and consistent with applicable international law, in order to defend our nation, our allies, our partners and our interests, the Obama administration said.

A U.S. defense official told Reuters he would give the Pentagon just a C+ grade overall for its cyber defenses but we're getting better, he said.