Exhibit 99.1

                    [LOGO]
                   AROTECH
632 Broadway, Suite 1200, New York, New York 10012
   Tel: (646) 654-2107 o Fax (646) 654-2187
               www.arotech.com

FOR IMMEDIATE RELEASE

                AROTECH TO ACQUIRE FAAC INCORPORATED - A LEADING
                          MILITARY SIMULATION COMPANY

   FAAC 2002 revenues over $15 million, with $1.8 million in pre-tax profit;
                  2003 pre-tax profit forecast at $1.6 million

      New York, NY, January 8, 2004 - Arotech Corporation (NasdaqNM: ARTX)
announced today that it has entered into a definitive agreement to acquire FAAC
Incorporated, a privately-owned corporation with corporate headquarters located
in Ann Arbor, Michigan. For more than 30 years, FAAC has provided simulators,
systems engineering and software products to the United States military,
government and private industry. This acquisition will significantly expand
Arotech's simulation business into the military arena. The closing of this
transaction is expected to take place next week.

      FAAC's 2002 revenues totaled over $15 million, with a pre-tax profit of
$1.8 million; pre-tax profit for 2003 is anticipated to be $1.6 million. The
purchase price is $14,000,000 ($12,000,000 in cash and $2,000,000 in Arotech
stock), plus an earn-out based on 2004 net pretax profit, with an additional
earn-out on the 2005 net profit from certain specific and limited programs. FAAC
management will stay with the company and will continue to manage FAAC as a
wholly-owned subsidiary of Arotech.

      The financing for the acquisition will come from funds raised from the
sale of the 8% convertible debentures in September and December 2003. McColl
Partners, LLC served as FAAC's exclusive financial advisor on the transaction

      FAAC () is a leading provider of driving simulators. FAAC'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. FAAC has an installed base of 169 simulators that have successfully
trained over 78,000 drivers. FAAC's customer base includes all branches of the
Department of Defense, state and local governments, and commercial entities.

      FAAC is the premier developer of validated, high fidelity analytical
models and simulations of tactical air and land warfare for all branches of the
Department of Defense and its related industrial contractors. Simulations
developed by FAAC are found in systems ranging from instrumented air combat and
maneuver ranges (such as Top Gun) to full task training devices such as the F-18
Weapon Tactics Trainer.

      FAAC supplies on-board software to support weapon launch decisions for the
F-15, F-18, and Joint Strike Fighter (JSF) fighter aircraft. Pilots benefit by
having highly accurate presentations of their weapon's capabilities, including
susceptibility to target defensive reactions.

      FAAC designed and developed an Instructor Operator Station (IOS), Mission
Operator Station (MOS) and real-time, database driven Electronic Combat
Environment (ECE) for the



Special Operational Forces Aircrew Training System (SOF ATS). The SOF ATS
provides a full range of aircrew training, including initial qualification,
mission qualification, continuation, and upgrade training, as well as combat
mission rehearsal.

      "This acquisition will significantly increase our revenues and lead us to
consistent EBITDA profitability in 2004," said Robert S. Ehrlich, Arotech's
Chairman, President and CEO. "Furthermore, combining the strengths of FAAC, a
leader in the military markets, and IES Interactive, a leader in simulators for
the law enforcement market, clearly presents significant synergy advantages for
Arotech."

      Arotech also reported that it has not yet reached a satisfactory agreement
with the lithium battery company with which it signed a letter of intent a few
months ago. Arotech is continuing negotiations, which it hopes will result in a
definitive agreement early in 2004.

About Arotech Corporation

      Arotech's corporate mission is to provide quality defense and security
products for the military, law enforcement and homeland security markets,
including advanced zinc-air batteries, multimedia interactive
simulators/trainers and lightweight armoring.

      Arotech Corporation (www.arotech.com) operates two business divisions:
Electric Fuel Batteries - developing and manufacturing zinc-air batteries for
military and homeland security applications and developing electric vehicle
batteries for zero emission public transportation; and Arotech Defense -
consisting of IES Interactive, which provides advanced high-tech multimedia
training systems for law enforcement and paramilitary organizations, MDT
Protective Industries, which provides vehicle armoring for the military,
industrial and private sectors, and Arocon Security, which provides homeland
security consulting and other services.

      Arotech is incorporated in Delaware and has corporate and sales offices in
New York and Denver with research, development and production subsidiaries in
Alabama, Colorado and Israel.

COMPANY CONTACT:
Jonathan Whartman
Senior VP, Communications
1-800-281-0356 ext 622
whartman@arotech.com

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; significant future capital
requirements; and other risk factors detailed in Arotech's most recent Annual
Report on Form 10-K for the fiscal year ended December 31, 2002 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.

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