Ampal Announces the Cancellation of the Sale of Its Holdings in Carmel Container Systems Ltd.

Business Editors

NEW YORK--(BUSINESS WIRE)--June 2, 2003

Ampal-American Israel Corporation (NASDAQ:AMPL) announced today that its agreement to sell its holdings in Carmel Container Systems Ltd. ("Carmel"), a packaging manufacturer based in Israel, has been cancelled.

The pending sale, and the conditions of the sale, had been announced by Ampal on January 6, 2003.

Carmel has informed Ampal that the Israeli Antitrust Authority has objected to the merger between Carmel and Best Carton Ltd., a merger that was a condition precedent to the closing of the sale of the Ampal group's holdings in Carmel to a subsidiary of Carmel. The agreement to sell Ampal's and Ampal's subsidiary's holdings in Carmel was therefore cancelled.

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: telecommunication, energy, high-technology, real estate, capital markets, leisure-time and other. For more information about the company please visit our web site at www.ampal.com.

Certain information in this press release includes forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) and information relating to the Company that are based on the beliefs of management of the Company as well as assumptions made by and information currently available to the management of the Company. When used in this press release, the words "anticipate," "believe," "estimate," "expect," "intend," "plan," and similar expressions as they relate to the Company or the management of the Company, identify forward-looking statements. Such statements reflect the current views of the Company with respect to future events or future financial performance of the Company, the outcome of which is subject to certain risks and other factors which could cause actual results to differ materially from those anticipated by the forward-looking statements, including among others, the economic and political conditions in Israel, the Middle East, including the situation in Iraq, and the global business and economic conditions in the different sectors and markets where the Company's portfolio companies operate. Should any of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or outcome may vary from those described herein as anticipated, believed, estimated, expected, intended or planned. Subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements in this paragraph. Please refer to the Company's annual, quarterly and periodic reports on file with the SEC for a more detailed discussion of these and other risks that could cause results to differ materially.