Working on a shoestring budget, the Israeli scientists and engineers building the shuttle - temporarily named "Sparrow" - believe it will land on the moon by the end of 2015, a feat only the United States, Russia and China have managed so far.
Photo courtesy of NASA
The landing will be the toughest task in the Sparrow's mission, not least because of the moon's many mountains and craters, said Yariv Bash, an electronic engineer and the founder of SpaceIL, the group building the spacecraft.
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"(Landing) is going to be either 15 minutes of horror or 15 minutes of fame, depending on the outcome," he told Reuters.
SpaceIL, which is backed mainly by philanthropists, was founded to compete for Google's LunarX Prize, unveiled in 2007. The $20 million prize will go to the first team to land a spacecraft on the moon, make it jump 500 metres and transmit images and video back to earth.
Thirty-three teams started out in the running and they are now down to 18, including competitors from the United States, Italy, Japan, Germany, Brazil, Canada, India and Chile.
SpaceIL believes it has an advantage because the unmanned craft is comparatively small - the size of a dishwasher with legs - and weighs just 140 kg (300 pounds).
Most of the craft's weight is its fuel and propulsion system. By the time it lands on the moon, it will weigh a mere 40 kg.
"The smaller you are, the less it will cost to go to space," Bash said.
The grey, six-sided shuttle will be fitted with nine computers and eight cameras, making it the smartest and smallest spacecraft to have landed on the moon, according to Bash.
At the moment there is just a prototype, with plans to start building the real machine later this year, a process that should take 12-18 months.
SpaceIL has raised $21 million in donations out of a total budget of $36 million it believes is needed to build and land the craft. It plans a crowd-funding event to secure the rest of the financing.
The group estimates other teams' budgets at $50-$100 million.
Unlike some of the other competitors in the space race, SpaceIL - which has a team of 250 people of mainly volunteers - is a nonprofit organisation and does not need to show investors a return.
"It's a harder sell to private investors," said Daniel Saat, SpaceIL's head of business development. "We have to convince investors we are doing something of impact for Israel that inspires and changes the country."
Even if it does not win, SpaceIL hopes to create an "Apollo effect" that will lead to a new wave of space engineers and scientists in the way Neil Armstrong's 1969 moon walk did, and turn space exploration into Israel's next start-up industry.
"For $36 million, we are going to show the world that there is no longer this glass ceiling in outer space exploration," Saat said.
Israel, which has experience in sending spy satellites to the lower orbit, does not have capabilities to launch into space, although the Israeli Space Agency is looking to develop a civilian space programme.
SpaceIL said it was close to signing a launch agreement and was considering sites in the United States, Europe, Russia and Kazakhstan.
The Israeli craft will remain on the moon indefinitely and SpaceIL is mulling doing a scientific experiment in studying the magnetic core of the moon.
Should SpaceIL win the prize, they plan to invest the money into new projects, which may include a probe to Mars.