Ampal-American Israel Corporation announces 1996 year-end results.

NEW YORK--(BUSINESS WIRE)--March 27, 1997--Ampal-American Israel Corporation announced today that it had incurred a net loss in the amount of $10,252,000, for the year ended December 31, 1996 (including a loss from discontinued operations of $2,892,000) compared to a net profit of $2,166,000 (including a loss from discontinued operations of $4,315,000) for the same period in 1995. The net loss per Class A Share totaled $.37 (including a net loss from discontinued operations of $.10 per share), compared to net earnings of $.08 (including a net loss of $.15 from discontinued operations) in 1995. Revenues for 1996 were $44,360,000 compared to $44,713,000 in 1995.

The net loss in 1996 was incurred primarily as a result of the Company's decision to record an $8.8 million charge against 1996 earnings for its full remaining investment in M.D.F. Industries Ltd., which owns and operates a recently opened plant in Israel for the production of medium density fiber boards. The charge, in addition to the $1,300,000 loss previously recorded by Ampal in 1996 with respect to M.D.F., resulted in a total loss attributable to M.D.F. in the amount of $8,600,000, net of tax benefits. M.D.F's cost of sales per production unit are in excess of its selling prices, resulting in significant losses which are expected to continue. M.D.F. will no longer be accounted for as an affiliate of the Company under the equity method of accountancy.

Total assets at December 31, 1996 were $283,551,000 compared to $312,094,000 at December 31, 1995. Shareholders' equity at December 31, 1996 was $152,120,000, compared to $164,415,000 at December 31, 1995. The figures for 1995 have been reclassified to reflect the current year's presentation, whereunder a former subsidiary is recorded as a discontinued operation.

The Company said that the results of other sectors, such as high technology affiliates and rental income from real estate were satisfactory, but did not overcome the disappointing results at M.D.F. and elsewhere where losses have been recorded.

Ampal and its subsidiaries acquire interests in businesses located in the State of Israel or that are Israeli-related. An important objective of Ampal is to make investments in companies which take advantage of growth in Israel's domestic economy. Ampal and its subsidiaries have diversified interests in the following sectors: high technology and communications, hotels and leisure-time, real estate, finance, energy distribution, basic industry, as well as others. -0-

                           FINANCIAL HIGHLIGHTS
                    (In thousands except earnings per share)

                  Three Months Ended           Year Ended
                     December 31               December 31
                     (unaudited)
                    1996        1995        1996        1995

Revenues         $ 14,500    $ 10,664    $ 44,360    $ 44,713

(Loss)Income
from Continuing
Operations         (6,347)       1281      (7,360)      6,481

(Loss) from
Discontinued
Operations           (257)     (2,187)     (2,892)     (4,315)

(Loss) Earnings
per Class A Share:

(Loss) Earnings
from Continuing
Operations          $(.23)       $.04       $(.27)       $.23

(Loss) from
Discontinued
Operations          $(.01)      $(.07)       (.10)      $(.15)

(Loss) Earnings
per Class A Share   $(.24)      $(.03)      $(.37)      $ .08

Total Assets      283,551     312,094     283,551     312,094


Shareholders'
Equity            152,120     164,415     152,120     164,415

CONTACT: Morgen-Walke Associates

Investor Relations:

Cindy Hintelmann, 212/850-5621

Press Relations:

Stan Froelich, 212/850-5657