Arotech’s IES Interactive Training Subsidiary Receives Over $600,000 in Orders from Police Departments

Arotech earnings will be released March 9

March 2, 2004 - Arotech Corporation (NasdaqNM: ARTX) announced today that its use-of-force training subsidiary, IES Interactive Training, Inc. has received purchase orders valued at over $600,000 for Range 3000 XP4 digital training simulators and FDU Firearms Diagnostic Units. Police departments nationwide and VA Medical Centers have ordered the IES training systems. With these deliveries, the Federal Protective Services has 8 installed IES Systems, and the VAMC has a total of 9 sites using the IES Range 3000 simulator.

The Company also announced today that it will report its year-end and fourth quarter 2003 results on Tuesday, March 9, 2004, after the close of the securities markets. Conference call details will be announced with the earnings release.

The Company also announced that it has entered into an agreement settling the litigation brought against it by I.E.S. Electronics Industries, Ltd. In settling the claim, as described in detail in an 8K SEC filing in February, IES Electronics canceled $450,000 in debt and transferred to the Company $112,000 in certificates of deposit. The Company issued to IES Electronics 450,000 shares and 450,000 five-year warrants at $1.91 per share. The cash expense of this settlement was approximately $200,000.

“Our Simulation Group, with FAAC and IES, is continuing to expand,” said Robert S. Ehrlich, Arotech’s Chairman, President and CEO. “We are now concentrating on expansion into the European market as well.”

About IES Interactive Training

IES Interactive Training, a wholly owned subsidiary of Arotech Corporation, is a manufacturer of interactive digital training solutions to corporations, government agencies, military and law enforcement professionals around the globe. By providing unique judgment-driven systems designed by an experienced team of professionals, IES sets the standard for interactive simulation training. Flagship products include the Range 3000 XP4, a multimedia simulator; the Range FDU, advanced firearm diagnostics unit; and the A2Z Classroom Trainer for interactive, real-time learning.

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.