Arotech Armoring Subsidiary MDT Awarded over $850,000 in New Contracts; Arotech Increases Holdings in MDT, Which Currently Has a Backlog Exceeding $1.25 Million

NEW YORK--Oct. 2, 20038, 2003--Arotech Corporation announced today that its MDT Protective Industries vehicle-armoring subsidiary was recently awarded new vehicle armoring contracts totaling over $850,000. These include the armoring of military vehicles and passenger vans. MDT currently has a vehicle-armoring backlog of over $1.25 million.

Arotech also announced that it had recently increased its holdings in MDT to 75.5%. Arotech acquired the additional stake in exchange for the issuance of 126,000 shares of its common stock, to be registered on a Form S-3 registration statement in the near future.

MDT Protective Industries, Arotech's Israel-based vehicle armoring subsidiary, is a leader in state-of the art, lightweight armoring of vehicles. MDT armors vehicles ranging from light tactical to passenger vehicles. MDT's vehicle armoring business has years of battlefield experience and has provided life-saving protection under the most extreme conditions, which include assault rifles and bomb blasts.

"Our armored vehicles are positioned to help protect the troops from some of the threats they are facing in Iraq," said Robert S. Ehrlich, Arotech Chairman and CEO. "We believe that MDT-armored vehicles may soon be seen there."

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, MDT Armor, which provides vehicle armoring for the military, industrial and private sectors, and Arcon Security, which provides homeland security consulting and other services.

Arotech is incorporated in Delaware 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 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.