Arotech Receives New Contract to Supply up to
$24 Million in Zinc-Air Batteries to the US Defense Department

Multi year contract reaffirms Arotech’s position as leading supplier of zinc-air batteries to the US Army

March 29, 2005 - Arotech Corporation (NasdaqNM: ARTX) announced today that its Electric Fuel Battery subsidiary has received from the US Army’s Communications and Electronic Command (CECOM), a new contract to supply up to $24 million in zinc-air batteries and adaptors to the DoD over the next three years.

The new Firm Fixed Price, Indefinite Delivery, Indefinite Quantity contract follows the successful implementation of a previous sole supplier contract, in which Arotech delivered its zinc-air batteries to the full satisfaction of CECOM. With the new contract award, Arotech continues to be the US Army’s sole source for fielded high power zinc-air batteries.

Under the new contract, Arotech’s Electric Fuel will be enabled to deliver the BA-8180/U and the three existing interface adapters. In addition, a new battery, the BA-8140/U, and four new adapters are introduced in this contract and have been ordered for First Article Testing (FAT).

“This new contract reinforces our leadership in zinc-air technology, which outperforms competing technologies in energy density,” said Robert S. Ehrlich, Chairman and CEO of Arotech. “We are committed to serving the Army with a safe and cost-effective technology that enhances the soldiers’ extended mission capabilities.”

Electric Fuel’s BA-8180/U zinc-air battery 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 lightweight, 30 ampere-hours cells. The existing adapters include the BA-5590/U eliminator and interfaces for ASIP 119F and SINCGARS 119B radios.

The new BA-8140/U zinc-air battery is a 12 Volt, 400 Watt-hour, non-rechargeable battery pack, approximately half the size and weight of the BA-8180/U. The new adapters included are for the MBITR radio, the M22 ACADA chemical detector, the Javelin CLU and SATCOM/HF radios.

Zinc-air batteries are considerably safer in combat situations, lighter for extended missions, more economical and more environmentally friendly than lithium batteries.

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.