Arotech's Simulation Technology Chosen by NYCT for Contract Valued at $1.96 Million

December 7, 2004 - Arotech Corporation (NasdaqNM: ARTX) announced today that its FAAC subsidiary belonging to its Simulation and Training Division, has received an award from New York City Transit for the production of a R160 Train Operator Simulator. The competitively awarded contract has a value of $1.96 million.

“This is a key win for FAAC” stated Alan Jordan, FAAC President. “New York City Transit is the global standard for transit rail operations. To be selected by New York City Transit to develop a next generation train simulator is an honor. We believe we can change the way train operators are trained much the way our MB-2000 bus simulator has changed the way transit bus operators are trained.”

“This exciting award will allow FAAC to further extend its simulation technology within the transit industry”, said Bob Ehrlich, Arotech CEO. “Many of FAAC's current bus simulator customers also operate transit rail systems. The train simulator product is a natural extension to the transit industry. By including a provision for interchangeable driving stations between bus and train simulators, the simulator reduces the overall acquisition cost”.

About FAAC

FAAC Incorporated has been providing high fidelity training and simulation products to its military and commercial customer base for over 30 years. FAAC supplies driving simulators for training operators of automobiles, trucks, police/fire/EMS vehicles, bus drivers, light rail operators, and airport ground vehicles. Over 85,000 drivers have been trained on FAAC's installed base of 185 driving simulators. FAAC also provides pilot decision-making support software for the F-15, F-18, and JSF aircraft as well as simulation models for the ACMI/TACTS air combat training ranges.

About Arotech Corporation

Arotech Corporation 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 armoring.

The Battery and Power Systems Division includes Electric Fuel Battery Corporation and Epsilor Electronic Industries Ltd. The Simulation, Training and Consulting Division includes IES Interactive Training, FAAC Incorporated and Arocon Security Consulting. The Armoring Division includes MDT Armor Corp., MDT Protective Industries Ltd. and Armour of America, Incorporated.

Arotech is incorporated in Delaware, with corporate offices in New York, and research, development and production subsidiaries in Alabama, Colorado, Michigan, California 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, as amended, for the fiscal year ended December 31, 2003 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.