Israeli-developed technology took center stage at Intel’s annual Developer Forum in San Francisco Tuesday as the company unveiled its new virtual/augmented reality system, code-named Project Alloy.

The system was introduced by Intel CEO Brian Krzanich in his keynote address at the event as an “all in one, self-contained virtual reality solution made from the ground up.”

Along with the new product, Intel introduced a new term — “merged reality” — which is where the Israeli part of Alloy comes in. While most virtual reality systems today are totally immersive, meaning you can get “lost” in the virtual world, Alloy allows users to integrate elements of the real world in an experience.

“Through merged reality, see your hands, see your friends … see the wall you are about to run into,” according to Intel. “Not only can you see these elements from the real world, but you can use your hands to interact with elements of your virtual world, merging realities.”

Alloy does this using Intel’s RealSense technology, a version of advanced gesture-based computing that allows users to interact with the camera and computers — for example, enabling them to change TV channels by moving their fingers in the air. Developed largely at Intel’s Haifa research labs, RealSense sees the distance between objects and separates objects from the background layers behind them. This visual data provides much better object, facial and gesture recognition than a traditional camera, according to the company, and creates a touch-free interface that responds to hand, arm, and head motions as well as facial expressions.

RealSense is at the heart of Alloy’s self-contained AR/VR system – the first one that “operates without pesky cords dangling from your VR headset connecting to the computer,” according to Intel. Other popular VR systems, like the Oculus Rift, are tethered to a PC, making their deployment in a true AR/VR world environment limited.

The RealSense-based Alloy Head-Mounted Device (HMD) allows users to move around with the headset on, but also features collision detection and avoidance, enabling the user to utilize physical movement to explore a virtual space.

“Alloy’s merged reality is made possible by Intel RealSense cameras attached to the headset and is not dependent on setting up any external sensors or cameras around the room,” said the company.

While it now belongs to the world, RealSense is a sabra at heart, according to senior Intel engineer Igal Iancu. “Israel is a hub of innovation in machine vision, chip development, and 3D technology. Israel was the natural place for the development of RealSense, which combines hardware and software to bring human-like senses to personal devices, so they can experience the world like we do.”

Alloy, said Krzanich, does exactly that. “We can take the virtual world into the real world. You can interact with the virtual world. We believe the capabilities Alloy introduces is truly significant,” he said in his address. “The Alloy platform completely redefines what is possible in an all-in-one VR platform.”