Arotech’s Successful Demonstration of Ultra-Capacitor / Zinc-Air Hybrid Electric Bus Draws Press and Dignitaries

Sheldon Silver, NY Assembly Speaker, says he will encourage use in New York

November 7, 2003 - Arotech Corporation (NasdaqNM: ARTX) announced today that its zero emission all-electric bus was successfully demonstrated yesterday in Schenectady and Albany, NY. The two demonstration drives of the Electric Fuel bus drew extensive TV coverage, with participation by dozens of reporters and members of the DOT/FTA appointed Peer Review Committee.

New York Assembly Speaker Sheldon Silver rode the bus around the Capitol in Albany. Mr. Silver talked to reporters on the bus, as they drove quietly along Albany’s streets. At the end of the drive, Mr. Silver said, “I was very impressed with the Electric Fuel clean air bus we have seen today, and we encourage such zero emission technology in New York.”

The demonstration and the Peer Review meeting are among the last tasks of Phase III of the zinc-air all electric transit bus program with the Federal Transit Administration. Members of the Peer Review Committee, set up by the DOT/FTA to evaluate the program, rode the crowded bus in Schenectady.

Phase IV of the FTA cost shared program will begin next month. It will explore steps necessary for commercializing the all-electric zinc-air / ultra-capacitor hybrid bus. To that end, Electric Fuel is working with an undisclosed company on finding alternative zinc available from existing zinc producing facilities.

About the Electric Fuel Bus

The bus demonstrated yesterday is powered by the Company's Electric Fuel zinc air fuel cell technology. Coupled with a pack of advanced ultra capacitors and an improved energy management system, the hybrid all electric bus has zero tailpipe emissions. An urban transit fleet based the Electric Fuel bus will not only improve the quality of the air – it will also help national security by reducing the dependence on imported fuel.

In a recent test the bus traveled 145 miles under typical city bus driving conditions, including stop and go, acceleration and constant speed. The average normal full day cycle for New York City buses is less than 90 miles. The Company believes that all-electric buses utilizing Electric Fuel's Zinc-Air technology have sufficient range to offer a practical alternative to diesel-powered buses.

The Electric Fuel All Electric Transit Bus is designed to operate as a full-size, zero emission 40-foot bus having a 20-ton gross vehicle weight (including passengers) and operating all standard bus features, including air conditioning.

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 Arocon 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; the outcome of the claims made by the I.E.S. Group; 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.