Arotech Establishes Simulation and Security
Subsidiary in the UK

February 23, 2005 - Arotech Corporation (NasdaqNM: ARTX) announced today that its FAAC subsidiary has established a new subsidiary, FAAC UK, to promote its innovative range of cost-effective simulator solutions for all aspects of driving training in the United Kingdom and Europe. Two managers, Julian Ford and Steve Carpenter, have joined FAAC UK, both bringing with them years of simulator and simulation development and marketing expertise and experience.

FAAC UK’s initial goal is to develop the transit simulator market in the United Kingdom – both within the bus community as well as for rail simulators. Mr. Ford and Mr. Carpenter were instrumental in helping FAAC to win the recently announced London Bus simulator program with First Bus. The subsidiary will develop the geo-specific driving world representing parts of London as part of the program. Additionally, it will provide the local service to the London-based simulator.

Over time, Arotech’s UK subsidiary will expand its target market to include truck, automobile, and military vehicle simulators and will provide local content and work share on UK and European programs. “The establishment of a United Kingdom operation, particularly with these two strong and experienced managers, is expected to accelerate our penetration into the European marketplace” stated Alan Jordan, FAAC CEO. “This should be a ripe market for our products, particularly in the transit arena where we have established market dominance in the U.S.”.

“As a leader of transit simulation solutions in the U.S., we have extensive experience in building high-quality simulators that are widely deployed by a diverse customer base,” said Robert Ehrlich, Chairman, President and CEO of Arotech. “With this expertise, we are well-positioned for the growing international transit simulator market.”

About Arotech’s Simulation and Security Division

Arotech’s Simulation and Security Division develops, manufactures and markets advanced hi-tech multimedia and interactive digital solutions for use-of-force and driving training of military, law enforcement, security and private industry personnel. The division’s fully interactive driver-training systems feature state-of-the-art vehicle simulator technology enabling training in situation awareness, risk analysis and decision making, emergency reaction and avoidance procedures, and conscientious equipment operation. Over 100,000 drivers have been trained on its installed base of 220 driving simulators. The division 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. In addition, the division’s use-of-force training products and services allow organizations to train their personnel in safe, productive and realistic environments.

Arotech’s Simulation and Security Division consists of FAAC Incorporated and IES Interactive Training Inc.

About Arotech Corporation

Arotech Corporation is a leading provider of quality defense and security products for the military, law enforcement and homeland security markets, including multimedia interactive simulators/trainers, lightweight armoring and advanced zinc-air and lithium batteries and chargers. Arotech operates through three major business divisions: Armor, Simulation and Security and Battery and Power Systems.

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, as amended, 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.