Arotech’s Armour Division Launches New Ultra Light Armored Combat Vehicle at the 2004 AUSA in Washington, DC

Arotech’s Power Systems Division will exhibit batteries and chargers

October 18, 2004 - Arotech Corporation (NasdaqNM: ARTX) announced today that its MDT Armor vehicle-armoring subsidiary will be launching its new ultra light armored combat vehicle at the 2004 AUSA Annual Meeting and Exposition on October 25-27 in Washington, DC.

The new vehicle – the David – was designed by MDT for Special Operation units that need a small, versatile and easy to maneuver armored combat vehicle. Tailored for the urban environment of the Low Intensity Conflict, the David offers armor piercing protection for a crew of 7, wide doors for fast in/out of troops on a platform that can easily get in and out of tight urban streets and alleys. The entire cabin, including front and rear doors, was designed by MDT, and built on a Land Rover Defender platform, utilizing advanced and composite materials. The David can also be built on a Mercedes G Wagon Platform. The David has been tested by the Israeli Defense Force, which has several units already in service.

“The David is a vehicle unique to MDT,” said Robert S. Ehrlich, Arotech Chairman and CEO. “It’s a small fully armored combat vehicle, but it can carry more soldiers than an armored HMMWWV (Humvee) and into tighter spots.”

MDT will be displaying in booth #4249 of the 2004 AUSA Annual Meeting and Exposition in the Washington Convention Center in Washington, DC. An armored 5-seater Land Rover Defender SUV will be on display, together with body armor and HMMWWV armor kits manufactured by Arotech’s Armour of America subsidiary.

Additionally, Electric Fuel Battery Corporation, Arotech’s Power System subsidiary, will be exhibiting in booth # 4217 a range of advanced military power sources, which include the BA-8180/U Zinc Air Power Pack, rechargeable batteries and associated smart chargers.

About MDT

MDT Armor 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 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 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 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.