Arotech MDT Armoring Subsidiary Awarded $1.1 Million Armored Vehicle Contract for Iraq

NEW YORK--Jan. 2, 20046, 2004--Arotech Corporation announced today that its MDT vehicle armoring subsidiary was awarded a $1.1 million contract for armored vehicles for operations in Iraq. The Land Rover Defender SUVs are being armored for delivery to Iraq over the next 6 weeks.

"These vehicles join the other armored vehicles that we have already delivered to Iraq," said Robert S. Ehrlich, Arotech Chairman and CEO. "It is clear that those serving and working in Iraq continue to need armored protection, and we are working diligently and proudly to serve them."

About MDT

MDT (www.mdt-armor.com) is a leader in state-of the art, lightweight armoring of 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. MDT armors a variety of armored vehicles: SUV's such as the Toyota Land Cruiser, the Land Rover Defender and the GM Suburban; vans and buses - from an 8 passenger Ford Econoline to a 16 passenger Mercedes bus; ambulances and other specialty 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, 2002 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.