Arotech’s IES Interactive Training Subsidiary
records over $1.7 Million in New Simulation Contract Awards

December 21, 2006 - Arotech's IES Interactive Training, Inc. announced today over $1.7 million in new simulation contract awards for its MILO Force-options training simulation systems, MILO Interactive Classroom Training systems and Course designer suites. These recent orders continue a successful 2006 for IES and follow several record months where IES had been awarded large multiple system contracts. IES Interactive Training is a branch of the Arotech Corporation’s Simulation and Training Division (NasdaqGM: ARTX).

Recent system awards include orders from a wide number of local, country state and federal agencies, as well as international orders from Mexico and Europe. IES also received several of orders from accredited academies, schools and colleges that are tasked with providing training for law enforcement and public safety officers that will protect citizens and property in the future.

“IES is particularly proud to have been selected as the simulation training system of choice by agencies that are training and certifying America’s newest law enforcement officers,” said Robert McCue, IES Director of Business Development. “We are very confident that the dynamic force options training these young officers will receive on IES simulation training systems today will prepare them to face the challenges law enforcement officers will encounter in the future.”

IES also received a number of new contract awards and purchase orders from prestigious municipal, state and federal law enforcement agencies, including the Colorado Bureau of Investigation, Nevada POST, US Dept of Veterans Affairs Police, US Army, US Dept of HUD-OIG, US Probation and Parole, and several contract plus-ups and upgrades from existing customers who have selected IES repeatedly over many years.

“We are pleased with the growth we have experienced in the law enforcement simulation market this year, and expect a strong opening in 2007 with anticipated new orders, particularly in the U.S federal and overseas markets, where interest in our systems and services remains high,” McCue noted.

For more information, please contact IES Interactive Training, Inc. at 1.800.344.1707 or visit our website at www.ies.usa.com

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.

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; 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.