Arotech Awarded London Bus Simulator Contract.

NEW YORK -- Arotech Corporation (NasdaqNM: ARTX) announced today that its Simulation and Security Division, through its FAAC subsidiary, has been awarded a contract valued at over $700,000 from First, the UK's leading public transport operator, to deliver the UK's first full-mission transit bus simulator to First's bus operations. The simulator is being developed in a partnership with First and London Buses based on actual bus components being supplied by Volvo and Wrightbus.

The bus simulator will incorporate computer-generated imagery (CGI) to provide a panoramic seamless display, including the use of real mirrors to view displays positioned behind the bus operator. A realistic, right-hand drive, virtual driving world representative of roads in London is being developed based on troublesome intersections and areas identified by First and London Buses. Vehicles being developed include straight bus frames and double-decker and articulated buses.

"We expect that training on the bus simulator in London will have a similar impact on safety as we have seen with our U.S. customers," stated Al Jordan, FAAC President. "Our customers have documented safety studies showing as much as a 43% reduction in preventable accidents attributable to training received on our MB-2000 bus driving simulators."

"The contract is an important step in expanding our international presence," said Robert S. Ehrlich, Chairman, President and CEO of Arotech. "We know safety is First's number one priority and the company has expressed a desire to pioneer transit simulator applications that will benefit bus passengers and employees in the UK. To encourage this, the contract provides incentives for ongoing cooperation meant to ensure the long-term success of this venture. We fully expect to see improvements in driving standards, which in turn, will generate interest and sales to other European transit programs in 2005."

About Arotech's Simulation and Security Division

Arotech's Simulation and Security Division develops, manufactures and markets advanced hi-tech multimedia and interactive digital solutions for use-of-force and driving training of military, law enforcement, security and private industry personnel. The division's fully interactive driver-training systems feature state-of-the-art vehicle simulator technology enabling training in situation awareness, risk analysis and decision making, emergency reaction and avoidance procedures, and conscientious equipment operation. Over 100,000 drivers have been trained on its installed base of 220 driving simulators. The division also provides pilot decision-making support software for the F-15, F-18, and JSF aircraft as well as simulation models for the ACMI/TACTS air combat training ranges. In addition, the division's use-of-force training products and services allow organizations to train their personnel in safe, productive and realistic environments.

Arotech's Simulation and Security Division consists of FAAC Incorporated and IES Interactive Training Inc.

About Arotech Corporation

Arotech Corporation is a leading provider of quality defense and security products for the military, law enforcement and homeland security markets, including multimedia interactive simulators/trainers, lightweight armoring and advanced zinc-air and lithium batteries and chargers. Arotech operates through three major business divisions: Armor, Simulation and Security and Battery and Power Systems.

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

About First

First is the UK's largest surface transport company with a turnover of nearly GBP 2.5 billion a year and over 62,000 employees across the UK and North America. Our vision is to Transform Travel - providing public transport services that are safe, reliable, high quality, personal and accessible. We want to deliver the perfect journey to all our customers. We are always looking to improve the way we work and to be forward thinking, innovative and enthusiastic.

The safety of our passengers and staff is of fundamental importance to us all and underpins everything that we do.

We are the UK's largest bus operator, running more than one in five of all local bus services and carrying over 2.8 million passengers every day. We have some 93,000 buses operating in 40 towns and cities. We operate passenger and freight rail services in the UK and the Croydon Tramlink network. For more information, please visit our website at www.firstgroup.com

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, as amended, 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.