Arotech Awarded New $5.2 Million US Army Battery Contract

CECOM contract for Electric Fuel BA-8180/U Zinc-Air Batteries follows 2003 $4.1 million orders

December 19, 2003 - Arotech Corporation (NasdaqNM: ARTX) announced today that a new contract has been entered into between its Electric Fuel battery manufacturing subsidiary and the US Army Communications Electronic Command (CECOM) for delivery of advanced zinc-air batteries.

The contract calls for delivery the BA-8180/U zinc-air non-rechargeable batteries, with a current order ceiling of $5.2 million. Electric Fuel is currently completing the delivery of batteries under the current contracts, which in 2003 totaled $4.1 million.

The BA-8180/U is a 12/24 Volt, 800 Watt-hour non-rechargeable battery pack, approximately the size and weight of a notebook computer. The battery is based on the new generation of lightweight, 30 ampere-hours cells developed by Electric Fuel over the last 5 years with partial funding by CECOM. In extensive field-testing, the BA-8180/U battery typically provided 4 to 6 times the run time of a BA-5590, a primary lithium battery pack widely used in the military. Zinc-air batteries are considerably safer in combat situations and more environmentally friendly than lithium batteries.

"This order is twice the size of either order we received in 2003 and we hope, with additional applications such as training and sensors, to see additional orders in 2004," said Arotech Chairman and CEO Robert S. Ehrlich.

About Arotech Corporation

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 Protective Industries, 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.