Am-Hal Ltd., Ampal's Wholly Owned Subsidiary, Grants an Option to the Phoenix Insurance Company to Purchase 19.9% of Am-Hal Ltd. and Receive a Loan of $12.5 million.

TEL AVIV, Israel -- Ampal-American Israel Corporation (Nasdaq:AMPL) announced today that Am-Hal Ltd. ("Am-Hal"), its wholly owned subsidiary, granted on December 1, 2005 to the Israeli Phoenix Insurance Company Ltd. and Hadar Insurance Company Ltd. (together - "Phoenix") an option to purchase within 4 years from the date of the agreement, 19.9% of Am-Hal's issued share capital for a consideration of $6 million. The option was granted in connection with a $12.5 million 10 year loan being made by Phoenix to Am-Hal.

Am-Hal intends to use the proceeds of the loan to fund, in part, its third luxury retirement center under the Ad-120 brand for senior citizens to be located at Ramat Hachayal, Tel Aviv as well as to further future development of Am-Hal.

The Ramat Hachayal center will consist of approximately 250 self contained apartments, nursing care ward, assisted-living ward and recreational facilities.

Jack Bigio, President and Chief Executive Officer of Ampal: "The agreement with the Phoenix is an expression of trust from a leading insurance company in Am-Hal's business model, brand and future. We intend to expand our activity in the retirement center sector, which we believe in, using our knowledge, rich experience and reputation. "

About Ampal

Ampal and its subsidiaries primarily acquire interests in businesses located in the State of Israel or that are Israel-related. Ampal has diversified interests in the following sectors: real estate, leisure-time and other. For more information about Ampal please visit our web site at www.ampal.com.

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