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ELBIT ANNOUNCE DETAILS OF WATCHKEEPER PARTICIPATION

10 Feb 03. Elbit Systems Ltd. (NASDAQ; ESLT) announced that it has been selected, as part of Thales Team, to participate in the final phase of the UK Watchkeeper Tactical Unmanned Air Vehicle (UAV) assessment.

Elbit Systems will provide to Watchkeeper the class leading Hermes-180 and Hermes-450 advanced Unmanned Air Vehicles. The company’s innovative design approach, state-of-the-art technologies and extensive experience in integrated UAV systems will support the team’s high performance level and low risk solution for the Watchkeeper Program, as required by the UK MoD.

Elbit Systems will now actively participate in the System Integration Assurance Phase (SIAP) as part of the Thales team, to demonstrate high level of confidence in rapid system introduction to service and provision of system required capabilities.

Joseph Ackerman, President and CEO of Elbit Systems, commented: “We are proud to be part of the Thales team for the UK Watchkeeper final assessment phase. Our substantial capabilities and extensive experience in the area of advanced UAV systems, as well as our current and future industrial activities in the UK, will contribute to the success of this highly important program.”

Comment: The selection of Elbit by Thales had been considered risky by a number of observers given the government’s stance on Israeli arms deals. Many had expected Thales to go with the General Atomics Prowler system, but it has stuck to the Israeli solution which some saw as problematic if the system were to be deployed in the Gulf. Elbit may be offering some form of licensed deal with Thales.

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