Arotech Battery Outperforms Lithium Ion Polymer in First Ever Zinc-Air Powered MAV Flight; Electric Fuel Zinc-Air Battery Powers Micro Aerial Vehicle -MAV- in Test Flights.

Business Editors

NEW YORK--(BUSINESS WIRE)--June 17, 2003

Arotech Corporation (NasdaqNM: ARTX) announced today that a zinc-air battery developed by its subsidiary, Electric Fuel Battery Corp., powered a Micro Aerial Vehicle (MAV) in test flights in Israel. 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 developed these batteries under a contract from an Israeli security agency, as reported by the Company last year. Under the terms of the contract, Electric Fuel is developing prototype zinc-air cells that can maintain high power densities for extended periods of time.

The Company recently announced that a prototype zinc-air battery developed for a US Unmanned Aerial Vehicle (UAV) passed a milestone in testing a Marine Dragon Eye unmanned drone.

Electric Fuel's cutting-edge zinc-air cells for 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.

"This is the first time zinc-air technology has been used to power an Aerial Vehicle," said Robert S. Ehrlich, Arotech Chairman and CEO. "The military places great importance on UAV's, and we are in position to greatly enhance their mission duration."

About Arotech Corporation

Arotech's corporate mission is to provide quality defense and security products for the military, law enforcement and homeland security markets, including advanced zinc-air batteries, multimedia interactive simulators/trainers and lightweight armoring.

Arotech Corporation (www.arotech.com) operates two business divisions: Electric Fuel Batteries -- developing and manufacturing zinc-air batteries for military and homeland security applications and developing electric vehicle batteries for zero emission public transportation; and Arotech Defense -- consisting of IES Interactive, which provides advanced high-tech multimedia training systems for law enforcement and paramilitary organizations, and MDT Armor, which provides vehicle armoring for the military, industrial and private sectors.

Arotech is incorporated in Delaware under the name "Electric Fuel Corporation" and has corporate and sales offices in New York and Denver with research, development and production subsidiaries in Alabama, Colorado 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; significant future capital requirements; and other risk factors detailed in Arotech's most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2002, as amended, and other filings (under the name Electric Fuel Corporation) 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.