Arotech's Electric Fuel Battery Subsidiary Receives Follow-on Micro Air Vehicle -MAV- Contract.

Business Editors

NEW YORK--(BUSINESS WIRE)--April 2, 2004

Contract from Israeli Defense Agency continues

similar 2002 & 2003 grants

Arotech Corporation (NasdaqNM: ARTX) announced today that its Electric Fuel subsidiary has received a follow-on contract from an Israeli security agency. Under the terms of the contract, Electric Fuel will continue developing prototype zinc-air cells for Micro Aerial Vehicles (MAV) that can maintain flight for extended periods of time.

In June last year, a zinc-air battery developed under the previous contract, powered a Micro Aerial Vehicle in test flights. The Electric Fuel zinc-air powered flight was longer than that achieved with the same MAV using a High Performance Lithium Ion Polymer battery.

Electric Fuel's cutting-edge zinc-air cells for Unmanned Aerial Vehicles (UAVs) and MAVs are high-power, lightweight versions of its most advanced zinc-air cells. The Company believes Electric Fuel's zinc air batteries have the potential to greatly extend the mission duration of these reconnaissance aircraft.

"MAVs and other unmanned ground and airborne vehicles need advanced power sources," said Robert S. Ehrlich, Arotech Chairman and CEO. "Our zinc-air battery can significantly increase mission time for these vehicles."

About Arotech Corporation

Arotech Corporation (www.arotech.com) provides quality defense and security products for the military, law enforcement and homeland security markets, including advanced zinc-air and lithium batteries and chargers, multimedia interactive simulators/trainers and lightweight vehicle armoring.

The Battery and Power Systems Division includes Electric Fuel Battery Corporation (www.electric-fuel.com) and Epsilor Electronic Industries (www.epsilor.com). The Simulation, Training and Consulting Division includes IES Interactive Training (www.ies-interactive.com), FAAC Incorporated (www.faac.com) and Arocon Security Consulting (www.arocon-security.com). The Armored Vehicle Division includes MDT Armor Corp. (www.mdt-armor.com) and MDT Protective Industries Ltd. (www.mdtisrael.com).

Arotech is incorporated in Delaware, with corporate offices in New York, and research, development and production subsidiaries in Alabama, Colorado, Michigan and Israel.

Except for the historical information herein, the matters discussed in this news release include forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements, as they are subject to various risks and uncertainties that may cause actual results to vary significantly. These risks and uncertainties include, but are not limited to, risks relating to: product and technology development; the uncertainty of the market for Arotech's products; changing economic conditions; delay, cancellation or non-renewal, in whole or in part, of contracts or of purchase orders; and other risk factors detailed in Arotech's most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2003 and other filings with the Securities and Exchange Commission. Arotech assumes no obligation to update the information in this release. Reference to the Company's website above does not constitute incorporation of any of the information thereon into this press release.