Arotech Simulation and Training Division Announces Record Month for IES with 34 Units Shipped and $1.8m in New Orders

July 6, 2006 - Arotech Corporation (NasdaqNM: ARTXD) announced today that IES, part of Arotech’s Simulation and Training Division, has experienced a record month in June with 34 units shipped and $1.8M in new orders. The new orders received included 30 units to the U.S. Department of Homeland Security for delivery next quarter.

“This record month and other recent orders validates IES’s industry leading position and affirms our dedication to providing the widest range of simulation based training products and best available services to the law enforcement sector,” said Robert McCue, IES Director of Business Development. “We understand the importance of judgmental use-of-force training and the role of IES products in preparing law enforcement personnel to face today’s challenges. We will continue to further IES’s capabilities through the resources now available as part of Arotech’s combined FAAC/IES operations.”

“I wish to congratulate IES on this milestone and commend the FAAC and IES personnel involved in the successful relocation of IES operations to Ann Arbor,” commented Steven Esses, Arotech President and Chief Operating Officer. “The recent vibrant performance of IES, coupled with the enhanced production capabilities of the consolidated FAAC and IES operations, validates our restructuring efforts within the Simulation and Training Division.”

About Arotech’s Simulation and Training Division

Arotech’s Simulation and Training Division develops, manufactures, and markets advanced high-tech multimedia and interactive digital solutions for use-of-force and driver training of military, law enforcement, security, municipal 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. In addition, the division’s use-of-force training products and services allow organizations to train their personnel in safe, productive, and realistic environments. The division also provides pilot decision-making support software for the F-15, F-16, F-18, and JSF aircraft, as well as simulation models for the ACMI/TACTS air combat training ranges.”

Arotech’s Simulation and Training 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 Training and Battery and Power Systems

Arotech is incorporated in Delaware, with corporate offices in Ann Arbor, Michigan, 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, including the results of our restructuring program. Forward-looking statements reflect management’s current knowledge, assumptions, judgment and expectations regarding future performance or events. Although management believes that the expectations reflected in such statements are reasonable, 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 materially. 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; Arotech’s ability to remain listed on the Nasdaq Stock Market in accordance with the Nasdaq’s $1.00 minimum bid price and other continued listing standards; dilution resulting from issuances of Arotech’s common stock upon conversion or payment of its outstanding convertible debt, which would be increasingly dilutive if and to the extent that the market price of Arotech’s stock decreases; and other risk factors detailed in Arotech’s most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2005, 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.