Ampal Expects $17.3 Million in Proceeds from the Sale of Granite Hacarmel Shares.

Business Editors

NEW YORK--(BUSINESS WIRE)--July 7, 2003

- Ampal-American Israel Corporation (Nasdaq:AMPL) today announced the completion of a private sale of 46.3% of its current holdings in Granite Hacarmel Investments Ltd. to a group of institutional investors. The sale of 12,350,000 shares at a price of $1.40 (6 NIS) per share is expected to result in total proceeds of $17.3 million. Proceeds from the sale have been earmarked for new investment opportunities.

The company noted that the sale of the Granite shares was initiated primarily to take advantage of favorable market conditions and to continue the Company's ongoing strategic policy to reduce its investments in companies where it is a minority investor. Ampal's current investment focus is on companies or ventures where Ampal can exercise significant influence and use its management's experience to enhance these investments. Ampal continues to hold a large stake in Granite Hacarmel and continues to view this as good investment.

"Right now we see many attractive investment opportunities in the Israeli market and will use the proceeds from the sale to further diversify our portfolio consistent with our focus on majority holdings in companies with strong growth profiles both in Israel and abroad," stated Jack Bigio, President and CEO of Ampal.

Mr. Bigio continued, "The value of the Granite Hacarmel transaction alone represents a disproportionate amount of Ampal's current market valuation, around 60%. We believe that the completion of this transaction will allow the market to begin to recognize the full value within Ampal's investment portfolio."

As of March 31, 2003, Ampal held 28,145,433 shares in Granite, which were carried on Ampal's financial statements at that date at a book value of $24.6 million. This sale of 12,350,000 Granite shares combined with previous sales over the past few weeks has reduced Ampal's stake to 14,328,980 shares of Granite representing 10.28% of the outstanding share capital of Granite.

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: 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.

About Granite

Granite is one of Israel's largest holding companies, Granite was established in 1981 and has been traded on the Tel Aviv Stock Exchange since 1992. Granite owns and controls Sonol, Tambour and Supergas, which are well known Israeli brand names with national marketing and distribution networks. Granite is also engaged in real estate through Granite Hacarmel Holdings and owns Allied Oils Chemicals and Granite Hacarmel Development Holdings.

Through its subsidiaries, Granite markets and distributes refined petroleum products, liquefied petroleum gas, chemicals, paints, lubricants, greases and related products, and is a leading manufacturer of sophisticated oil products as well. Granite is also engaged in water purification and desalination, oil and gas exploration, real estate investments and tourism projects.

Forward Looking Statements

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.