Elbit Systems Selected by Lockheed Martin to Develop Modified F-16 Data Entry Electronics Unit.

HAIFA, Israel--(BUSINESS WIRE)--Aug. 31, 1998--Elbit Systems Ltd. (NASDAQ-NM Symbol: ESLTF) announced today it has been selected for two contracts from Lockheed Martin with a total value of $11.1 million.

The first contract, expected to be about $6.9 million, will be for the development of a commercialized Data Entry Electronics Unit to replace the current unit on the F-16 aircraft. The contract will be awarded to EFW Inc., Elbit Systems' wholly owned subsidiary in Fort Worth, Texas.

Under the expected contract, EFW and Elbit Systems are to develop and deliver 25 prototypes of the enhanced unit based on advanced commercial technologies, designated the Commercial Data Entry Electronics Unit ("CDEEU"). The development phase is expected to be performed over a period of two years. Following development, Lockheed Martin plans to initiate a production order for 750 units. The CDEEU is part of the U.S. Air Force's Common Configuration Implementation Program ("CCIP") for the F-16C/D, under which Lockheed Martin will provide significant avionics upgrades for the Block 40 and 50 F-16s-- ensuring their state-of-the-art capability well into the 21st century.

Elbit Systems also received a contract from Lockheed Martin Astronautics in Denver, Colorado, for a follow-on production order of electronic units for the Atlas Centaur Launchers. Under the contract, valued at $4.2 million, Elbit Systems is to supply 480 units over a 24-month period.

Elbit Systems Ltd. is engaged in a wide range of defense-related airborne, ground and command, control and communications ("C3") programs throughout the world. The Company focuses on upgrading of existing military platforms and developing new technologies for defense applications.

Forward looking statements with respect to the Company's business, financial condition and results of operations, in this release are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward looking statements, including, but not limited to, product demand, pricing, market acceptance, changing economic conditions, risks in product and technology development, the effect of the Company's accounting policies as well as certain other risk factors which are detailed from time to time in the Company's SEC filings.

    CONTACT: Elbit Systems Ltd., Haifa
              Arie Tal, Corporate Secretary
              Ilan Pacholder, Finance
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              Lippert/Heilshorn & Associates, Inc., New York
              Jody Burfening
              212-838-3777
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