PROSPECTUS                                      Filed pursuant to Rule 424(b)(1)
----------
                                                Registration File No. 333-106420

                                 [ELECTRIC FUEL
                                CORPORATION LOGO]

                                DOING BUSINESS AS

                                    [AROTECH
                                CORPORATION LOGO]

                                 563,971 SHARES
                                  COMMON STOCK


                           --------------------------

     This prospectus relates to the offer and sale of up to 563,971 shares of
the common stock of Electric Fuel Corporation, doing business as Arotech
Corporation, from time to time by our stockholder listed in this prospectus.

     The selling stockholder may offer its shares in public transactions on the
Nasdaq National Market at prevailing market prices or in negotiated private
transactions at negotiated prices. Our common stock is listed on the Nasdaq
National Market under the ticker symbol "ARTX." The last reported sale price for
our common stock on August 4, 2003 as quoted on the Nasdaq National Market was
$1.14 per share.

     INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" ON PAGE 6 FOR VARIOUS RISKS THAT YOU SHOULD CONSIDER BEFORE YOU
PURCHASE ANY SHARES OF OUR COMMON STOCK.

     NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.


                 ---------------------------------------------

                  The date of this prospectus is August 5, 2003






                             TABLE OF CONTENTS
                                                                       PAGE
Summary.............................................................     3
Risk Factors........................................................     6
Information Regarding Forward-Looking Statements....................    16
Use of Proceeds.....................................................    17
Selling Stockholder.................................................    17
Plan of Distribution................................................    18
Description of Capital Stock........................................    19
Legal Matters.......................................................    20
Experts.............................................................    20
Where You Can Find Additional Information...........................    21
Incorporation of Documents by Reference.............................    21

                             ----------------------

         Unless the context otherwise requires, references to us - Electric Fuel
or Arotech - refer to Electric Fuel Corporation (doing business as Arotech
Corporation) and our subsidiaries.



                                       2



                                     SUMMARY

         The following summary highlights some information from this prospectus.
It is not complete and does not contain all of the information that you should
consider before making an investment decision. You should read this entire
prospectus, including the "Risk Factors" section, the financial statements and
related notes and the other more detailed information appearing elsewhere or
incorporated by reference in this prospectus. Unless otherwise indicated, "we,"
"us," "our" and similar terms refer to Electric Fuel Corporation, which is doing
business as Arotech Corporation, and its subsidiaries and not to the selling
stockholder.

         Electric Fuel(R) is a registered trademark that belongs to us. All
company and product names mentioned may be trademarks or registered trademarks
of their respective holders.

                                    ABOUT US

         We are a world leader in primary and refuelable Zinc-Air fuel cell
technology, engaging directly and through our subsidiaries in the use of
Zinc-Air battery technology for defense and security products and other military
applications and for electric vehicles, in car armoring, and in interactive
multimedia use-of-force simulators. We have been doing business since February
2003 under the name "Arotech Corporation." We operate in two business units:

          >>   we develop, manufacture and market defense and security products,
               including advanced hi-tech multimedia and interactive digital
               solutions for training of military, law enforcement and security
               personnel and sophisticated lightweight materials and advanced
               engineering processes to armor vehicles; and

          >>   we pioneer advancements in Zinc-Air battery technology for
               defense and security products and other military applications and
               for electric vehicles.

RECENT DEVELOPMENTS

     CONVERSION OF DEBENTURES AND EXERCISE OF WARRANTS

         During the period from May 20, 2003 through June 9, 2003, holders of
our 9% secured convertible debentures converted a total of $900,000 of debt into
1,406,250 shares of our common stock, and holders of warrants issued in
connection with our debentures exercised a total of 1,000,029 warrants,
resulting in proceeds to us of $640,018.56.

     CECOM ORDERS

         In December 2002, we entered into a contract with the US Army
Communications Electronic Command (CECOM) pursuant to 10 U.S.C. ss. 2304c(2),
"Unusual and Compelling Urgency," for a delivery order of advanced Zinc-Air
batteries. The contract calls for order releases during the first three calendar
quarters of 2003, with a current order ceiling of $2,543,250.

         In April 2003, we announced that we had received an additional $1.6
million order from CECOM for a delivery order of advanced Zinc-Air batteries,
with deliveries anticipated to take place from September through November 2003.

DEFENSE AND SECURITY PRODUCTS

     INTERACTIVE USE-OF-FORCE TRAINING

         Through our wholly-owned IES subsidiary, we provide specialized "use of
force" training for police, homeland security personnel and the military. We
offer products and services that allow organizations to train their personnel in


                                       3


safe, productive, and realistic environments. We believe that our training
systems offer more functionality, greater flexibility, unprecedented realism and
a wider variety of user interface options than competing products. Our systems
are sold to corporations, government agencies, military and law enforcement
professionals around the world. The simulators are currently used by some of the
worlds leading training academies, including (in the United States) the Secret
Service, the Bureau of Alcohol, Tobacco and Firearms, the Houston Police
Department, the Customs Service, the Border Patrol, the Bureau of Engraving and
Printing, the Coast Guard, the Federal Law Enforcement Training Centers, the
California Department of Corrections, the Detroit Police Department, the
Washington DC Metro Police and international users such as the Israeli Defense
Forces, the German National Police, the Royal Thailand Army, the Hong Kong
Police, the Russian Security Police, and over 400 other training departments
worldwide.

         Our interactive training systems range from the powerful Range 3000
use-of-force simulator system to the multi-faceted A2Z Classroom Training
system. The Range 3000 line of simulators addresses the entire use of force
training continuum in law enforcement, allowing the trainee to use posture,
verbalization, soft hand skills, impact weapons, chemical spray, low-light
electronic weapons and lethal force in a scenario based classroom environment.
The A2Z Classroom Trainer provides the trainer with real time electronic
feedback from every student through wireless handheld keypads. The combination
of interactivity and instant response assures that learning takes place in less
time with higher retention.

     VEHICLE ARMORING

         Through our majority-owned MDT Protective Industries subsidiary, we
specialize in using state-of-the-art lightweight ceramic materials, special
ballistic glass and advanced engineering processes to fully armor vans and cars.
MDT is a leading supplier to the Israeli military, Israeli special forces and
special services. MDT's products are proven in intensive battlefield situations
and under actual terrorist attack conditions, and are designed to meet the
demanding requirements of governmental and private sector customers worldwide.

ELECTRIC FUEL BATTERIES

     ZINC-AIR FUEL CELLS AND BATTERIES

         We believe that our Zinc-Air batteries provides the highest energy and
power density combination available today in the defense market, making them
particularly appropriate where long missions are required and low weight is
important.

         Our line of existing battery products for the military and defense
sectors includes Advanced Zinc-Air Power Packs (AZAPPs) utilizing our most
advanced cells (which have specific energy of 400 watt-hours per kilogram), a
line of super-lightweight AZAPPs that feature the same 400 Wh/kg cell technology
in smaller cells, and our new, high-power Zinc-Air Power Packs (ZAPPs), which
offer extended-use portable power using our commercial Zinc-Air cell technology.
Our AZAPPs have received a National Stock Number (a Department of Defense
catalog number assigned to products authorized for use by the U.S. military),
making our AZAPPs available for purchase by all units of the U.S. Armed Forces.

         We are continuing to expand the development of other advanced uses of
our battery technology for applications that demand high energy and light
weight. We also produce water-activated lifejacket lights for commercial
aviation and marine applications, and will pursue further development of the
safety products business.

     ELECTRIC VEHICLE

         Our Electric Vehicle effort, conducted through our subsidiary Electric
Fuel Transportation Corp., continues to focus on obtaining and implementing
demonstration projects in the U.S. and Europe, and on building broad industry


                                       4


partnerships that can lead to eventual commercialization of the Zinc-Air energy
system. This approach supports our long-term strategy of achieving widespread
implementation of the Electric Fuel Zinc-Air energy system for electric vehicles
in large commercial and mass transit vehicle fleets. Our all-electric bus,
powered by our Zinc-Air fuel cell technology, has demonstrated a world-record
127-mile range under rigorous urban conditions, and we have successfully
demonstrated our vehicle in "on-the-road" programs in Germany, Sweden, Italy,
Israel and the United States, most recently in public tests in Las Vegas,
Nevada, in November 2001, and in Washington, D.C., on Capitol Hill, with the
participation of certain members of the United States Senate, in March 2002. We
intend to strengthen existing relationships and to develop new networks of
strategic alliances with fleet operators, companies engaged in energy production
and transportation, automobile manufacturers and others in order to establish
the infrastructure necessary for further development and commercialization of
the Electric Fuel Zinc-Air system.

FACILITIES

         We were incorporated in Delaware in 1990 and began doing business under
the name "Arotech Corporation" in February 2003. We anticipate changing our
corporate name from "Electric Fuel Corporation" to "Arotech Corporation" at our
next annual shareholders' meeting later in 2003. Our principal executive offices
are located at 632 Broadway, New York, New York 10012, and our telephone number
is (646) 654-2107. Our Internet address is www.arotech.com. Our periodic reports
to the Securities Exchange Commission, as well as recent filings relating to
transactions in our securities by our executive officers and directors, that
have been filed with the Securities and Exchange Commission in EDGAR format are
available through hyperlinks located on the investor relations page of our
website, at www.arotech.com/compro/investor.html. INFORMATION ON OUR WEBSITE
DOES NOT CONSTITUTE PART OF THIS PROSPECTUS.

         The offices and facilities of our two of our principal subsidiaries,
Electric Fuel Limited (EFL) and MDT, are located in Israel (in Beit Shemesh and
Lod, respectively, both of which are within Israel's pre-1967 borders). We
conduct research and development activities through EFL, and most of our senior
management is located at EFL's facilities. We also conduct development and
production activities at IES's offices in Littleton, Colorado, and at our new
production facility in Auburn, Alabama, which builds and tests advanced
batteries for the defense market.



                                       5




                                  RISK FACTORS

  AN INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD
  CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS AND OTHER INFORMATION IN THIS
   PROSPECTUS IN ADDITION TO OUR FINANCIAL STATEMENTS BEFORE INVESTING IN OUR
 COMMON STOCK. IN ADDITION TO THE FOLLOWING RISKS, THERE MAY ALSO BE RISKS THAT
 WE DO NOT YET KNOW OF OR THAT WE CURRENTLY THINK ARE IMMATERIAL THAT MAY ALSO
  IMPAIR OUR BUSINESS OPERATIONS. THE TRADING PRICE OF OUR COMMON STOCK COULD
    DECLINE DUE TO ANY OF THESE RISKS, AND YOU MAY LOSE ALL OR PART OF YOUR
                                  INVESTMENT.

BUSINESS-RELATED RISKS

     WE HAVE HAD A HISTORY OF LOSSES AND MAY INCUR FUTURE LOSSES.

         We were incorporated in 1990 and began our operations in 1991. We have
funded our operations principally from funds raised in each of the initial
public offering of our common stock in February 1994; through subsequent public
and private offerings of our common stock and equity and debt securities
convertible into shares of our common stock; research contracts and supply
contracts; funds received under research and development grants from the
Government of Israel; and sales of products that we and our subsidiaries
manufacture. We have incurred significant operating losses since our inception.
Additionally, as of March 31, 2003, we had an accumulated deficit of
approximately $102.1 million. There can be no assurance that we will ever
achieve profitability or that our business will continue to exist. Additionally,
because we do not presently meet the transaction requirements for filing
registration statements for primary offerings of our securities on the simpler
Form S-3 registration statement, raising capital through sales of our securities
may be more difficult in the future than it has been in the past.

     OUR EXISTING INDEBTEDNESS MAY ADVERSELY AFFECT OUR ABILITY TO OBTAIN
ADDITIONAL FUNDS AND MAY INCREASE OUR VULNERABILITY TO ECONOMIC OR BUSINESS
DOWNTURNS.

         Our indebtedness aggregated approximately $3.7 million as of June 15,
2003. Accordingly, we are subject to the risks associated with indebtedness,
including:

          o    we must dedicate a portion of our cash flows from operations to
               pay debt service costs and, as a result, we have less funds
               available for operations, future acquisitions of consumer
               receivable portfolios, and other purposes;

          o    it may be more difficult and expensive to obtain additional funds
               through financings, if available at all;

          o    we are more vulnerable to economic downturns and fluctuations in
               interest rates, less able to withstand competitive pressures and
               less flexible in reacting to changes in our industry and general
               economic conditions; and

          o    if we default under any of our existing debt instruments or if
               our creditors demand payment of a portion or all of our
               indebtedness, we may not have sufficient funds to make such
               payments.

The occurrence of any of these events could materially adversely affect our
results of operations and financial condition and adversely affect our stock
price.

         The agreements governing the terms of our debentures contain numerous
affirmative and negative covenants that limit the discretion of our management
with respect to certain business matters and place restrictions on us, including
obligations on our part to preserve and maintain our assets and restrictions on
our ability to incur or guarantee debt, to merge with or sell our assets to
another company, and to make significant capital expenditures without the
consent of the debenture holders. Our ability to comply with these and other
provisions of such agreements may be affected by changes in economic or business
conditions or other events beyond our control.





                                       6




     FAILURE TO COMPLY WITH THE TERMS OF OUR DEBENTURES COULD RESULT IN A
DEFAULT THAT COULD HAVE MATERIAL ADVERSE CONSEQUENCES FOR US.

         A failure to comply with the obligations contained in our debenture
agreements, including a failure to have our registration statement registering
the shares underlying our debentures and the warrants issued as part of the
debenture financing declared effective by the SEC on or before January 1, 2004,
could result in an event of default under such agreements which could result in
an acceleration of the debentures and the acceleration of debt under other
instruments evidencing indebtedness that may contain cross-acceleration or
cross-default provisions. If the indebtedness under the debentures or other
indebtedness were to be accelerated, there can be no assurance that our assets
would be sufficient to repay in full such indebtedness. The foregoing
description of our agreement with our debenture holders is qualified in its
entirety by reference to the agreements with our debenture holders filed as
exhibits to our Current Reports on Form 8-K that we filed with the SEC on
January 6, 2003 and on April 4, 2003.

     WE HAVE PLEDGED A SUBSTANTIAL PORTION OF OUR ASSETS TO SECURE OUR
BORROWINGS.

         The debentures are secured by a substantial portion of our assets. If
we default under the indebtedness secured by our assets, those assets would be
available to the secured creditor to satisfy our obligations to the secured
creditor, which could materially adversely affect our results of operations and
financial condition and adversely affect our stock price.

     WE NEED SIGNIFICANT AMOUNTS OF CAPITAL TO OPERATE AND GROW OUR BUSINESS.

         We require substantial funds to conduct the necessary research,
development and testing of our products; to establish commercial scale
manufacturing facilities; and to market our products. We continue to seek
additional funding, including through the issuance of equity or debt securities.
However, there can be no assurance that we will obtain any such additional
financing in a timely manner or on acceptable terms. If additional funds are
raised by issuing equity securities, stockholders may incur further dilution. If
additional funding is not secured, we will have to modify, reduce, defer or
eliminate parts of our anticipated future commitments and/or programs.

     WE MAY NOT BE SUCCESSFUL IN OPERATING A NEW BUSINESS.

         Prior to the IES and MDT acquisitions, our primary business was the
marketing and sale of products based on primary and refuelable Zinc-Air fuel
cell technology and advancements in battery technology for defense and security
products and other military applications, electric vehicles and consumer
electronics. As a result of the IES and MDT acquisitions, a substantial
component of our business will be the marketing and sale of hi-tech multimedia
and interactive digital solutions for training military, law enforcement and
security personnel and sophisticated lightweight materials and advanced
engineering processes used to armor vehicles. These are new businesses for us
and our management group has limited experience operating these types of
businesses. Although we have retained the management personnel at IES and MDT,
we cannot assure that such personnel will continue to work for us or that we
will be successful in managing this new business. If we are unable to
successfully operate these new businesses, especially the business of IES, our
business, financial condition and results of operations could be materially
impaired.

     WE CANNOT ASSURE YOU OF MARKET ACCEPTANCE OF OUR MILITARY ZINC-AIR BATTERY
PRODUCTS AND ELECTRIC VEHICLE TECHNOLOGY.

         Our batteries for the defense industry and a signal light powered by
water-activated batteries for use in life jackets and other rescue apparatus are
the only commercial Zinc-Air battery products we currently have available for
sale. Significant resources will be required to develop and produce additional
consumer products utilizing this technology on a commercial scale. Additional
development will be necessary in order to commercialize our technology and each
of the components of the Electric Fuel System for electric vehicles and defense
products. We cannot assure you that we will be able to successfully develop,
engineer or commercialize our Zinc-Air energy system, or that we will be able to
develop products for commercial sale or that, if developed, they can be produced
in commercial quantities or at acceptable costs or be successfully marketed. The
likelihood of our future success must be considered in light of the risks,


                                       7


expenses, difficulties and delays frequently encountered in connection with the
operation and development of a relatively early stage business and with
development activities generally.

         We believe that public pressure and government initiatives are
important factors in creating an electric vehicle market. However, there can be
no assurance that there will be sufficient public pressure or that further
legislation or other governmental initiatives will be enacted, or that current
legislation will not be repealed, amended, or have its implementation delayed.
In addition, we are subject to the risk that even if an electric fuel vehicle
market develops, a different form of zero emission or low emission vehicle will
dominate the market. In addition, we cannot assure you that other solutions to
the problem of containing emissions created by internal combustion engines will
not be invented, developed and produced. Any other solution could achieve
greater market acceptance than electric vehicles. The failure of a significant
market for electric vehicles to develop would have a material adverse effect on
our ability to commercialize this aspect of our technology. Even if a
significant market for electric vehicles develops, there can be no assurance
that our technology will be commercially competitive within that market.

     OUR ACQUISITION STRATEGY INVOLVES VARIOUS RISKS.

         Part of our strategy is to grow through the acquisition of companies
that will complement our existing operations or provide us with an entry into
markets we do not currently serve. Growth through acquisitions involves
substantial risks, including the risk of improper valuation of the acquired
business and the risk of inadequate integration. There can be no assurance that
suitable acquisition candidates will be available, that we will be able to
acquire or manage profitably such additional companies or that future
acquisitions will produce returns that justify our investments therein. In
addition, we may compete for acquisition and expansion opportunities with
companies that have significantly greater resources than we do. Furthermore,
acquisitions could disrupt our ongoing business, distract the attention of our
senior managers, make it difficult to maintain our operational standards,
controls and procedures and subject us to contingent and latent risks that are
different, in nature and magnitude, than the risks we currently face.

         We may finance future acquisitions with cash from operations or
additional debt or equity financings. There can be no assurance that we will be
able to generate internal cash or obtain financing from external sources or
that, if available, such financing will be on terms acceptable to us. The
issuance of additional common stock to finance acquisitions may result in
substantial dilution to our stockholders. Any debt financing may significantly
increase our leverage and may involve restrictive covenants which limit our
operations.

     WE MAY NOT SUCCESSFULLY INTEGRATE OUR NEW ACQUISITIONS.

         In light of our recent acquisitions of IES and MDT, our success will
depend in part on our ability to manage the combined operations of these
companies and to integrate the operations and personnel of these companies along
with our other subsidiaries and divisions into a single organizational
structure. There can be no assurance that we will be able to effectively
integrate the operations of our subsidiaries and divisions and our
newly-acquired businesses into a single organizational structure. Integration of
these operations could also place additional pressures on our management as well
as on our key technical resources. The failure to successfully manage this
integration could have an adverse material effect on us.

         If we are successful in acquiring additional businesses, we may
experience a period of rapid growth that could place significant additional
demands on, and require us to expand, our management, resources and management
information systems. Our failure to manage any such rapid growth effectively
could have a material adverse effect on our financial condition, results of
operations and cash flows.

     IF WE ARE UNABLE TO MANAGE OUR GROWTH, OUR OPERATING RESULTS WILL BE
IMPAIRED.

         We are currently experiencing a period of growth and development
activity which could place a significant strain on our personnel and resources.
Our activity has resulted in increased levels of responsibility for both
existing and new management personnel. Many of our management personnel have had
limited or no experience in managing growing companies. We have sought to manage
our current and anticipated growth through the recruitment of additional


                                       8


management and technical personnel and the implementation of internal systems
and controls. However, our failure to manage growth effectively could adversely
affect our results of operations.

     WE WILL NEED TO DEVELOP THE EXPERIENCE TO MANUFACTURE CERTAIN OF OUR
PRODUCTS IN COMMERCIAL QUANTITIES AND AT COMPETITIVE PRICES.

         We currently have limited experience in manufacturing in commercial
quantities and have, to date, produced only limited quantities of military
batteries and components of the batteries for electric vehicles. In order for us
to be successful in the commercial market, these products must be manufactured
to meet high quality standards in commercial quantities at competitive prices.
The development of the necessary manufacturing technology and processes will
require extensive lead times and the commitment of significant amounts of
financial and engineering resources, which may not be available to us. We cannot
assure you that we will successfully develop this technology or these processes.
Moreover, we cannot assure you that we will be able to successfully implement
the quality control measures necessary for commercial manufacturing.

     SOME OF THE COMPONENTS OF OUR TECHNOLOGY AND OUR PRODUCTS POSE POTENTIAL
SAFETY RISKS WHICH COULD CREATE POTENTIAL LIABILITY EXPOSURE FOR US.

         Some of the components of our technology and our products contain
elements that are known to pose potential safety risks. Also, because electric
vehicle batteries contain large amounts of electrical energy, they may cause
injuries if not handled properly. In addition to these risks, and although we
incorporate safety procedures in our research, development and manufacturing
processes, there can be no assurance that accidents in our facilities will not
occur. Any accident, whether occasioned by the use of all or any part of our
products or technology or by our manufacturing operations, could adversely
affect commercial acceptance of our products and could result in significant
production delays or claims for damages resulting from injuries. Any of these
occurrences would materially adversely affect our operations and financial
condition.

     WE MAY FACE PRODUCT LIABILITY CLAIMS.

         To date, there have been no material claims or threatened claims
against us by users of our products, including the products manufactured by MDT,
based on a failure of our products to perform as specified. In the event that
any claims for substantial amounts were to be asserted against us, they could
have a materially adverse effect on our financial condition and results of
operations. We maintain general product liability insurance. However, there is
no assurance that the amount of our insurance will be sufficient to cover
potential claims or that the present amount of insurance can be maintained at
the present level of cost, or at all.

     SOME OF OUR BUSINESS IS DEPENDENT ON GOVERNMENT CONTRACTS.

         Most of IES's customers to date have been in the public sector of the
U.S., including the federal, state and local governments, and in the public
sectors of a number of other countries, and most of MDT's customers have been in
the public sector in Israel. A significant decrease in the overall level or
allocation of defense spending or law enforcement in the U.S. or other countries
could have a material adverse effect on our future results of operations and
financial condition.

         Sales to public sector customers are subject to a multiplicity of
detailed regulatory requirements and public policies as well as to changes in
training and purchasing priorities. Contracts with public sector customers may
be conditioned upon the continuing availability of public funds, which in turn
depends upon lengthy and complex budgetary procedures, and may be subject to
certain pricing constraints. Moreover, U.S. government contracts and those of
many international government customers may generally be terminated for a
variety of factors when it is in the best interests of the government and
contractors may be suspended or debarred for misconduct at the discretion of the
government. There can be no assurance that these factors or others unique to
government contracts or the loss or suspension of necessary regulatory licenses
will not have a material adverse effect on our future results of operations and
financial condition.


                                       9


     OUR FIELDS OF BUSINESS ARE HIGHLY COMPETITIVE.

         The competition to develop defense and security products and electric
vehicle battery systems, and to obtain funding for the development of these
products, is, and is expected to remain, intense.

         Our defense and security products compete with other manufacturers of
specialized training systems, including Firearms Training Systems, Inc., a
producer of interactive simulation systems designed to provide training in the
handling and use of small and supporting arms. In addition, we compete with
manufacturers and developers of armor for cars and vans, including O'Gara-Hess &
Eisenhardt, a division of Armor Holdings, Inc.

         Our battery technology competes with other battery technologies, as
well as other Zinc-Air technologies. The competition in this area of our
business consists of development stage companies, major international companies
and consortia of such companies, including battery manufacturers, automobile
manufacturers, energy production and transportation companies, consumer goods
companies and defense contractors. Many of our competitors have financial,
technical, marketing, sales, manufacturing, distribution and other resources
significantly greater than ours.

         Various battery technologies are being considered for use in electric
vehicles and defense and safety products by other manufacturers and developers,
including the following: lead-acid, nickel-cadmium, nickel-iron, nickel-zinc,
nickel-metal hydride, sodium-sulfur, sodium-nickel chloride, zinc-bromine,
lithium-ion, lithium-polymer, lithium-iron sulfide, primary lithium,
rechargeable alkaline and Zinc-Air.

         If we are unable to compete successfully in each of our operating
areas, especially in the defense and security products area of our business, our
business and results of operations could be materially adversely affected.

     FAILURE TO RECEIVE REQUIRED REGULATORY PERMITS OR TO COMPLY WITH VARIOUS
REGULATIONS TO WHICH WE ARE SUBJECT COULD ADVERSELY AFFECT OUR BUSINESS.

         Regulations in Europe, Israel, the United States and other countries
impose various controls and requirements relating to various components of our
business. While we believe that our current and contemplated operations conform
to those regulations, we cannot assure you that we will not be found to be in
non-compliance. We have applied for, and received, the necessary permits under
the Israel Dangerous Substances Law, 5753-1993, required for the use of
potassium hydroxide and zinc metal. However, there can be no assurance that
changes in these regulations or the adoption of new regulations will not impose
costly compliance requirements on us, subject us to future liabilities, or
restrict our ability to operate our business.

     OUR BUSINESS IS DEPENDENT ON PATENTS AND OTHER PROPRIETARY RIGHTS THAT MAY
BE DIFFICULT TO PROTECT AND COULD AFFECT OUR ABILITY TO COMPETE EFFECTIVELY.

         Our ability to compete effectively will depend on our ability to
maintain the proprietary nature of our technology and manufacturing processes
through a combination of patent and trade secret protection, non-disclosure
agreements and licensing arrangements. We hold patents, or patent applications,
covering elements of our technology in the United States and in Europe. In
addition, we have patent applications pending in the United States and in
foreign countries, including the European Community, Israel and Japan. We intend
to continue to file patent applications covering important features of our
technology. We cannot assure you, however, that patents will issue from any of
these pending applications or, if patents issue, that the claims allowed will be
sufficiently broad to protect our technology. In addition, we cannot assure you
that any of our patents will not be challenged or invalidated, that any of our
issued patents will afford protection against a competitor or that third parties
will not make infringement claims against us.

         Litigation, or participation in administrative proceedings, may be
necessary to protect our proprietary rights. This type of litigation can be
costly and time consuming and could divert company resources and management
attention to defend our rights, and this could harm us even if we were to be
successful in the litigation. The invalidation of patents owned by or licensed
to us could have a material adverse effect on our business. In addition, patent
applications filed in foreign countries are subject to laws, rules and
procedures that differ from those of the United States. Therefore, there can be


                                       10


no assurance that foreign patent applications related to patents issued in the
United States will be granted. Furthermore, even if these patent applications
are granted, some foreign countries provide significantly less patent protection
than the United States. In the absence of patent protection, and despite our
reliance upon our proprietary confidential information, our competitors may be
able to use innovations similar to those used by us to design and manufacture
products directly competitive with our products. In addition, no assurance can
be given that others will not obtain patents that we will need to license or
design around. To the extent any of our products are covered by third-party
patents, we could require a license under such patents to develop and market our
patents.

         Despite our efforts to safeguard and maintain our proprietary rights,
we may not be successful in doing so. In addition, competition is intense, and
there can be no assurance that our competitors will not independently develop or
patent technologies that are substantially equivalent or superior to our
technology. Moreover, in the event of patent litigation, we cannot assure you
that a court would determine that we were the first creator of inventions
covered by our issued patents or pending patent applications or that we were the
first to file patent applications for those inventions. If existing or future
third-party patents containing broad claims were upheld by the courts or if we
were found to infringe third party patents, we may not be able to obtain the
required licenses from the holders of such patents on acceptable terms, if at
all. Failure to obtain these licenses could cause delays in the introduction of
our products or necessitate costly attempts to design around such patents, or
could foreclose the development, manufacture or sale of our products. We could
also incur substantial costs in defending ourselves in patent infringement suits
brought by others and in prosecuting patent infringement suits against
infringers.

         We also rely on trade secrets and proprietary know-how that we seek to
protect, in part, through non-disclosure and confidentiality agreements with our
customers, employees, consultants, strategic partners and potential strategic
partners. We cannot assure you that these agreements will not be breached, that
we would have adequate remedies for any breach or that our trade secrets will
not otherwise become known or be independently developed by competitors.

     WE HAVE UNDERGONE RECENT MANAGEMENT CHANGES.

         In October 2002, Yehuda Harats, who had been our CEO since the
inception of our company, resigned from his positions with us in order to pursue
other interests. Our Board of Directors selected our long-time Chairman of the
Board, Robert S. Ehrlich, to be our new President and CEO. Our success will
depend to some extent on our ability to quickly and smoothly execute the change
in leadership as a result of this change of CEO.

     WE ARE DEPENDENT ON KEY PERSONNEL AND OUR BUSINESS WOULD SUFFER IF WE FAIL
TO RETAIN THEM.

         We are highly dependent on certain members of our management and
engineering staff, and the loss of the services of one or more of these persons
could adversely affect us. We are especially dependent on the services of our
Chairman, President and Chief Executive Officer, Robert S. Ehrlich. The loss of
Mr. Ehrlich could have a material adverse effect on us. We are party to an
employment agreement with Mr. Ehrlich, which agreement expires at the end of
2003. We do not have key-man life insurance on Mr. Ehrlich.

     THERE ARE RISKS INVOLVED WITH THE INTERNATIONAL NATURE OF OUR BUSINESS.

         A significant portion of our sales are made to customers located
outside the U.S., primarily in Europe and Asia. In 2000, 2001 and 2002, without
taking account of revenues derived from discontinued operations, 45%, 49%, and
56%, respectively, of our revenues, including, in the case of 2002, the revenues
of IES and MDT, were derived from sales to customers located outside the U.S. We
expect that our international customers will continue to account for a
substantial portion of our revenues in the near future. Sales to international
customers may be subject to political and economic risks, including political
instability, currency controls, exchange rate fluctuations, foreign taxes,
longer payment cycles and changes in import/export regulations and tariff rates.
In addition, various forms of protectionist trade legislation have been and in
the future may be proposed in the U.S. and certain other countries. Any
resulting changes in current tariff structures or other trade and monetary
policies could adversely affect our sales to international customers.


                                       11


     WE MAY BE SUBJECT TO INCREASED UNITED STATES TAXATION.

         We believe that Electric Fuel and our wholly-owned Israeli subsidiary
EFL will be treated as personal holding companies for purposes of the personal
holding company (PHC) rules of the Internal Revenue Code of 1986. Under the PHC
rules, a PHC is subject to a special 39.6% tax on its "undistributed PHC
income," in addition to regular income tax. We believe that Electric Fuel and
EFL have not had any material undistributed PHC income. However, no assurance
can be given that Electric Fuel and EFL will not have undistributed PHC income
in the future.

         Approximately 21.5% of the stock of EFL was deemed to be beneficially
owned (indirectly through their ownership of our stock by application of certain
attribution rules) as of June 15, 2003 by four United States citizens: Leon S.
Gross, Austin W. Marxe and David M. Greenhouse, and Robert S. Ehrlich
(information with respect to the stockholdings of Messrs. Marxe and Greenhouse
is based on a Schedule 13G filed with the Securities and Exchange Commission on
February 11, 2002, as amended on February 13, 2003). If more than 50% of either
(i) the voting power of our stock, or (ii) the total value of our stock, is ever
acquired or deemed to be acquired by five or fewer individuals (including, if
applicable, those individuals who currently own an aggregate of 21.5% of our
shares) who are United States citizens or residents, EFL would satisfy the
foreign personal holding company (FPHC) stock ownership test under the Internal
Revenue Code, and we could be subject to additional U.S. taxes (including PHC
tax) on any "undistributed FPHC income" of EFL. We believe that EFL has not had
any material undistributed FPHC income. However, no assurance can be given that
EFL will not become a FPHC and have undistributed FPHC income in the future.

     INVESTORS SHOULD NOT PURCHASE OUR COMMON STOCK WITH THE EXPECTATION OF
RECEIVING CASH DIVIDENDS.

         We currently intend to retain any future earnings for funding growth
and, as a result, do not expect to pay any cash dividends in the foreseeable
future.

MARKET-RELATED RISKS

     THE PRICE OF OUR COMMON STOCK IS VOLATILE.

         The market price of our common stock has been volatile in the past and
may change rapidly in the future. The following factors, among others, may cause
significant volatility in our stock price:

          o    Announcements by us, our competitors or our customers;

          o    The introduction of new or enhanced products and services by us
               or our competitors;

          o    Changes in the perceived ability to commercialize our technology
               compared to that of our competitors;

          o    Rumors relating to our competitors or us;

          o    Actual or anticipated fluctuations in our operating results; and

          o    General market or economic conditions.

     IF OUR SHARES WERE TO BE DELISTED, OUR STOCK PRICE MIGHT DECLINE FURTHER
AND WE MIGHT BE UNABLE TO RAISE ADDITIONAL CAPITAL.

         One of the continued listing standards for our stock on the Nasdaq
National Market is the maintenance of a $1.00 bid price. Our stock price has
periodically traded below $1.00 since October 18, 2002. If our bid price were to
go and remain below $1.00 for 30 consecutive business days, Nasdaq could notify
us of our failure to meet the continued listing standards, after which we would
have 90 calendar days to correct such failure or be delisted from the Nasdaq
National Market. We would also have the opportunity to appeal this notification,
although there can be no assurances that this appeal would be resolved
favorably.


                                       12


         There can be no assurance that our common stock will remain listed on
the Nasdaq National Market. If our common stock were to be delisted from the
Nasdaq National Market, we might apply to be listed on the Nasdaq SmallCap
market; however, there can be no assurance that we would be approved for listing
on the Nasdaq SmallCap market, which has the same $1.00 minimum bid and other
similar requirements as the Nasdaq National Market. If we were to move to the
Nasdaq SmallCap market, current Nasdaq regulations would give us the opportunity
to obtain an additional 180-day grace period and an additional 90-day grace
period after that if we meet certain net income, shareholders' equity or market
capitalization criteria. While our stock would continue to trade on the
over-the-counter bulletin board following any delisting from the Nasdaq, any
such delisting of our common stock could have an adverse effect on the market
price of, and the efficiency of the trading market for, our common stock. Also,
if in the future we were to determine that we need to seek additional equity
capital, it could have an adverse effect on our ability to raise capital in the
public equity markets.

         In addition, if we fail to maintain Nasdaq listing for our securities,
and no other exclusion from the definition of a "penny stock" under the Exchange
Act is available, then any broker engaging in a transaction in our securities
would be required to provide any customer with a risk disclosure document,
disclosure of market quotations, if any, disclosure of the compensation of the
broker-dealer and its salesperson in the transaction and monthly account
statements showing the market values of our securities held in the customer's
account. The bid and offer quotation and compensation information must be
provided prior to effecting the transaction and must be contained on the
customer's confirmation. If brokers become subject to the "penny stock" rules
when engaging in transactions in our securities, they would become less willing
to engage in transactions, thereby making it more difficult for our stockholders
to dispose of their shares.

     WE ARE SUBJECT TO SIGNIFICANT INFLUENCE BY SOME STOCKHOLDERS THAT MAY HAVE
THE EFFECT OF DELAYING OR PREVENTING A CHANGE IN CONTROL.

         As of June 15, 2003, our directors, executive officers and principal
stockholders and their affiliates (including Leon S. Gross (10.7%), Austin W.
Marxe and David M. Greenhouse (7.4%), and Robert S. Ehrlich (4.1%)) collectively
are deemed beneficially to own approximately 21.5% of the outstanding shares of
our common stock, including options and warrants exercisable within 60 days of
June 15, 2003 (information with respect to the stockholdings of Messrs. Marxe
and Greenhouse is based on a Schedule 13G filed with the Securities and Exchange
Commission on February 11, 2002, as amended on February 13, 2003). As a result,
these stockholders are able to exercise significant influence over matters
requiring stockholder approval, including the election of directors and approval
of significant corporate transactions. This concentration of ownership may also
have the effect of delaying, preventing or discouraging a change in control of
Electric Fuel.

         Pursuant to a voting rights agreement dated September 30, 1996, as
amended, between Leon S. Gross, Robert S. Ehrlich, Yehuda Harats and us,
Lawrence M. Miller, Mr. Gross's advisor, is entitled to be nominated to serve on
our board of directors so long as Mr. Gross, his heirs or assigns retain
beneficial ownership of at least 1,375,000 shares of common stock. In addition,
under the voting rights agreement, Mr. Gross and Messrs. Ehrlich and Harats
agreed to vote and take all necessary action so that Messrs. Ehrlich, Harats and
Miller shall serve as members of the board of directors until the earlier of
December 28, 2004 or our fifth annual meeting of stockholders after December 28,
1999. Mr. Harats resigned as a director in 2002; however, we believe that Mr.
Harats must continue to comply with the terms of this agreement.

     A SUBSTANTIAL NUMBER OF OUR SHARES ARE AVAILABLE FOR SALE IN THE PUBLIC
MARKET AND SALES OF THOSE SHARES COULD ADVERSELY AFFECT OUR STOCK PRICE.

         Sales of a substantial number of shares of common stock into the public
market, or the perception that those sales could occur, could adversely affect
our stock price or could impair our ability to obtain capital through an
offering of equity securities. As of June 15, 2003, we had 37,552,540 shares of
common stock issued and outstanding. Of these shares, 30,016,937, including the
shares being registered for resale under this prospectus, will after the date of
this prospectus be freely transferable without restriction under the Securities
Act of 1933 and 7,223,103 may be sold subject to the volume restrictions,


                                       13


manner-of-sale provisions and other conditions of Rule 144 under the Securities
Act of 1933.

         In connection with a stock purchase agreement dated September 30, 1996
between Leon S. Gross and us, we also entered into a registration rights
agreement with Mr. Gross dated September 30, 1996, setting forth registration
rights with respect to the shares of common stock issued to Mr. Gross in
connection with the offering. These rights include the right to make two demands
for the registration of the shares of our common stock owned by Mr. Gross. In
addition, Mr. Gross was granted unlimited rights to "piggyback" on registration
statements that we file for the sale of our common stock. Mr. Gross presently
owns 3,547,870 shares, of which 1,538,462 have never been registered.

         In addition, pursuant to the terms of their employment agreements with
us, both Yehuda Harats and Robert S. Ehrlich have a right to demand registration
of their shares. Of the shares owned by Mr. Harats, 435,404 shares have never
been registered, and of the 688,166 shares owned by Mr. Ehrlich, 453,933 shares
have never been registered.

     EXERCISE OF OUR WARRANTS, OPTIONS AND CONVERTIBLE DEBT COULD ADVERSELY
AFFECT OUR STOCK PRICE AND WILL BE DILUTIVE.

     As of June 15, 2003, there were outstanding warrants to purchase a total of
8,421,209 shares of our common stock at a weighted average exercise price of
$2.02 per share, options to purchase a total of 5,715,955 shares of our common
stock at a weighted average exercise price of $2.16 per share, of which
5,131,032 were vested and exercisable within 60 days of the date of this
prospectus, at a weighted average exercise price of $2.15 per share, and
outstanding debentures and promissory notes convertible into a total of
4,626,471 shares of our common stock at a weighted average conversion price of
$0.65 per share. Holders of our options, warrants and convertible debt will
probably exercise or convert them only at a time when the price of our common
stock is higher than their respective exercise or conversion prices.
Accordingly, we may be required to issue shares of our common stock at a price
substantially lower than the market price of our stock. This could adversely
affect our stock price. In addition, if and when these shares are issued, the
percentage of our common stock that existing stockholders own will be diluted.

     OUR CERTIFICATE OF INCORPORATION AND BYLAWS AND DELAWARE LAW CONTAIN
PROVISIONS THAT COULD DISCOURAGE A TAKEOVER.

     Provisions of our amended and restated certificate of incorporation may
have the effect of making it more difficult for a third party to acquire, or of
discouraging a third party from attempting to acquire, control of us. These
provisions could limit the price that certain investors might be willing to pay
in the future for shares of our common stock. These provisions:

          o    divide our board of directors into three classes serving
               staggered three-year terms;

          o    only permit removal of directors by stockholders "for cause," and
               require the affirmative vote of at least 85% of the outstanding
               common stock to so remove; and

          o    allow us to issue preferred stock without any vote or further
               action by the stockholders.

     The classification system of electing directors and the removal provision
may tend to discourage a third-party from making a tender offer or otherwise
attempting to obtain control of us and may maintain the incumbency of our board
of directors, as the classification of the board of directors increases the
difficulty of replacing a majority of the directors. These provisions may have
the effect of deferring hostile takeovers, delaying changes in our control or
management, or may make it more difficult for stockholders to take certain
corporate actions. The amendment of any of these provisions would require
approval by holders of at least 85% of the outstanding common stock.


                                       14


ISRAEL-RELATED RISKS

     A SIGNIFICANT PORTION OF OUR OPERATIONS TAKES PLACE IN ISRAEL, AND WE COULD
BE ADVERSELY AFFECTED BY THE ECONOMIC, POLITICAL AND MILITARY CONDITIONS IN THAT
REGION.

         The offices and facilities of two of our principal subsidiaries, EFL
and MDT, are located in Israel (in Beit Shemesh and Lod, respectively, both of
which are within Israel's pre-1967 borders). We conduct research and development
activities through EFL, and most of our senior management is located at EFL's
facilities. Although we expect that most of our sales will be made to customers
outside Israel, we are nonetheless directly affected by economic, political and
military conditions in that country. Accordingly, any major hostilities
involving Israel or the interruption or curtailment of trade between Israel and
its present trading partners could have a material adverse effect on our
operations. Since the establishment of the State of Israel in 1948, a number of
armed conflicts have taken place between Israel and its Arab neighbors and a
state of hostility, varying in degree and intensity, has led to security and
economic problems for Israel.

         Historically, Arab states have boycotted any direct trade with Israel
and to varying degrees have imposed a secondary boycott on any company carrying
on trade with or doing business in Israel. Although in October 1994, the states
comprising the Gulf Cooperation Council (Saudi Arabia, the United Arab Emirates,
Kuwait, Dubai, Bahrain and Oman) announced that they would no longer adhere to
the secondary boycott against Israel, and Israel has entered into certain
agreements with Egypt, Jordan, the Palestine Liberation Organization and the
Palestinian Authority, Israel has not entered into any peace arrangement with
Syria or Lebanon. Moreover, since September 2000, there has been a significant
deterioration in Israel's relationship with the Palestinian Authority, and a
significant increase in terror and violence. Efforts to resolve the problem have
failed to result in an agreeable solution. Continued hostilities between the
Palestinian community and Israel and any failure to settle the conflict may have
a material adverse effect on our business and us. Moreover, the current
political and security situation in the region has already had an adverse effect
on the economy of Israel, which in turn may have an adverse effect on us.

         Many of our employees are currently obligated to perform annual reserve
duty in the Israel Defense Forces and are subject to being called for active
military duty at any time. No assessment can be made of the full impact of such
requirements on us in the future, particularly if emergency circumstances occur,
and no prediction can be made as to the effect on us of any expansion of these
obligations. However, further deterioration of hostilities with the Palestinian
community into a full-scale conflict might require more widespread military
reserve service by some of our employees, which could have a material adverse
effect on our business.

     SERVICE OF PROCESS AND ENFORCEMENT OF CIVIL LIABILITIES ON US AND OUR
OFFICERS MAY BE DIFFICULT TO OBTAIN.

         We are organized under the laws of the State of Delaware and will be
subject to service of process in the United States. However, approximately 49%
of our assets are located outside the United States. In addition, two of our
directors and all of our executive officers are residents of Israel and all or a
substantial portion of the assets of such directors and executive officers are
located outside the United States.

         There is doubt as to the enforceability of civil liabilities under the
Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as
amended, in original actions instituted in Israel. However, subject to certain
time limitations and other conditions, Israeli courts may enforce final
judgments of United States courts for liquidated amounts in civil matters,
including judgments based upon the civil liability provisions of the Securities
Act and the Exchange Act. As a result, it may not be possible for investors to
enforce or effect service of process upon these directors and executive officers
or to judgments of U.S. courts predicated upon the civil liability provisions of
U.S. laws against our assets, as well as the assets of these directors and
executive officers. In addition, awards of punitive damages in actions brought
in the U.S. or elsewhere may be unenforceable in Israel.


                                       15



     ANY FAILURE TO OBTAIN THE TAX BENEFITS FROM THE STATE OF ISRAEL THAT WE
EXPECT TO RECEIVE COULD NEGATIVELY IMPACT OUR PLANS AND PROSPECTS.

         We have benefited from various Israeli government programs, grants and
tax benefits, particularly as a result of the "approved enterprise" status of a
portion of our existing facilities and the receipt of grants from the Office of
the Chief Scientist of the Israeli Ministry of Industry and Trade. To be
eligible for some of these programs, grants and tax benefits, we must continue
to meet certain conditions, including producing in Israel and making specified
investments in fixed assets. If we fail to meet such conditions in the future,
we could be required to refund grants already received, adjusted for inflation
and interest. From time to time, the government of Israel has discussed reducing
or eliminating the benefits available under approved enterprise programs. In
addition, EFL has granted a floating lien (that is, a lien that applies not only
to assets owned at the time but also to after-acquired assets) over all of EFL's
assets as a security to the State of Israel to secure its obligations under the
approved enterprise programs.

     OUR GRANTS FROM THE ISRAELI GOVERNMENT IMPOSE CERTAIN RESTRICTIONS ON US.

         Since 1992, our Israeli subsidiary, EFL, has received funding from the
Office of the Chief Scientist of the Israel Ministry of Industry and Trade
relating to the development of our zinc-air battery products, such as our
electric vehicle and our batteries and chargers for consumer products. Between
1998 and 2000, we have also received funds from the Israeli-U.S. Bi-National
Industrial Research and Development (BIRD) Foundation. Through the end of 2002,
we have received an aggregate of $9.9 million from grants from the Chief
Scientist (net of royalties paid) and $772,000 from grants from BIRD, and we may
receive future grants, the amounts of which would be determined at the time of
application. The funding from the Chief Scientist prohibits the transfer or
license of know-how and the manufacture of resulting products outside of Israel
without the permission of the Chief Scientist. Although we believe that the
Chief Scientist does not unreasonably withhold this permission if the request is
based upon commercially justified circumstances and any royalty obligations to
the Chief Scientist are sufficiently assured, the matter is solely within the
discretion of the Chief Scientist, and we cannot be sure that such consent, if
requested, would be granted upon terms satisfactory to us or granted at all.
Without such consent, we would be unable to manufacture any products developed
by this research outside of Israel, even if it would be less expensive for us to
do so. Additionally, current regulations require that, in the case of the
approved transfer of manufacturing rights out of Israel, the maximum amount to
be repaid through royalty payments would be increased to between 120% and 300%
of the amount granted, depending on the extent of the manufacturing to be
conducted outside of Israel, and that an increased royalty rate of up to 5%
would be applied. These restrictions could adversely affect our potential
revenues and net income from the sale of such products.

     EXCHANGE RATE FLUCTUATIONS BETWEEN THE U.S. DOLLAR AND THE ISRAELI NIS MAY
NEGATIVELY AFFECT OUR EARNINGS.

Although a substantial majority of our revenues and a substantial portion of our
expenses are denominated in U.S. dollars, a significant portion of our costs,
including personnel and facilities-related expenses, is incurred in New Israeli
Shekels (NIS). Inflation in Israel will have the effect of increasing the dollar
cost of our operations in Israel, unless it is offset on a timely basis by a
devaluation of the NIS relative to the dollar.

     SOME OF OUR AGREEMENTS ARE GOVERNED BY ISRAELI LAW.

         Israeli law governs both our agreement with IES and our agreement with
MDT, as well as certain other agreements, such as our lease agreements on our
subsidiaries' premises in Israel. While Israeli law differs in certain respects
from American law, we do not believe that these differences materially adversely
affect our rights or remedies under these agreements.

                INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

         When used in this prospectus, the words "expects," "anticipates,"
"estimates" and similar expressions identify forward-looking statements. These
statements are "forward-looking" statements within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act. These statements, which
include statements under the caption "Risk Factors" and elsewhere in this
prospectus, refer to the stage of development of our products, the uncertainty
of the market for disposable cell phone batteries, significant future capital
requirements and our plans to implement our growth strategy, continue our


                                       16


research and development, expand our manufacturing capacity, develop strategic
relationships for marketing and other purposes and carefully manage our growth.
The forward-looking statements also include our expectations concerning factors
affecting the markets for our products.

        These forward-looking statements are subject to risks and uncertainties
that could cause actual results to differ materially from the results that we
anticipate. These risks and uncertainties include, but are not limited to, those
risks discussed in this prospectus and in the documents incorporated by
reference in this prospectus.

         All such forward-looking statements are current only as of the date on
which such statements were made. We assume no obligation to update these
forward-looking statements or to update the reasons actual results could differ
materially from the results anticipated in the forward-looking statements.

         You should rely only on the information in this prospectus and the
additional information described under the heading "Where You Can Find
Additional Information." We have not authorized any other person to provide you
with different information. If anyone provides you with different or
inconsistent information, you should not rely upon it. You should assume that
the information in this prospectus was accurate on the date of the front cover
of this prospectus only. Our business, financial condition, results of
operations and prospects may have changed since that date.

                                 USE OF PROCEEDS

         All net proceeds from the sale of the shares of common stock offered
hereunder by the selling stockholder will go to the stockholder who offers and
sells them. We will not receive any of the proceeds from the offering by the
selling stockholder.

                               SELLING STOCKHOLDER

         The selling stockholder listed below acquired its shares of common
stock from us in connection with our acquisition of IES. The shares of common
stock listed below to be sold in this offering are issuable to the selling
stockholder upon conversion of three $150,000 promissory notes due June 30,
2004. The promissory notes under which the shares are issuable were issued in
reliance upon the exemption from registration provided by Section 4(2) of the
Securities Act as transactions by an issuer not involving a public offering.

         Registration of the selling stockholder's shares does not necessarily
mean that the selling stockholder will sell all or any of the shares.

         The selling stockholder may donate or transfer as gifts some or all of
its shares, or may transfer its shares for no value to other beneficial owners.
The selling stockholder will include these donees or transferees as selling
stockholders in a prospectus supplement if the donees or transferees wish to use
this prospectus to re-offer the shares.

         The shares listed below represent all of the shares that the selling
stockholder currently beneficially owns, the number of shares it may offer, and
the percentage of our outstanding common stock owned by such stockholder.




                                      Shares                                Shares
                                   Beneficially                          Beneficially
                                  Owned Prior to        Shares Being     Owned After     Percent
  Name of Selling Stockholder       Offering(1)           Offered         Offering(2)   of Class
  ---------------------------       -----------           -------         -----------   --------
                                                                               
IES Electronics Industries Ltd.      563,971(3)           563,971(3)              0         *


---------------------------
*    Less than 1%.
(1)  Assumes that the selling stockholder acquires no additional shares of
     common stock before completion of this offering.
(2)  Assumes that all of the shares held by the selling stockholder and offered
     under this prospectus are sold.
(3)  Includes 563,971 shares issuable upon conversion of three $150,000
     promissory notes due June 30, 2004. IES Electronics Industries Ltd. is a
     public company trading on the Tel-Aviv Stock Exchange.


                                       17


                              PLAN OF DISTRIBUTION

     We are registering the shares of our common stock on behalf of the selling
stockholder. "Selling stockholder," as used in this prospectus, includes donees
and pledgees selling shares received from the selling stockholder after the date
of this prospectus. We have agreed, among other things, to bear all expenses,
other than underwriting discounts and selling commissions, in connection with
the registration and sale of the shares of our common stock covered by this
prospectus. In addition, we have agreed to indemnify the selling stockholder
against certain losses, claims, damages and liabilities, including liabilities
under the Securities Act. We will not receive any of the proceeds from the
offering of the shares of our common stock by the selling stockholder. The
selling stockholder may offer its shares of Electric Fuel common stock from time
to time in one or more of the following transactions:

          o    on any national securities exchange or quotation service on which
               the shares of common stock may be listed or quoted at the time of
               sale;

          o    in the over-the-counter market;

          o    in transactions otherwise than on a national securities exchange
               or quotation service or in the over-the-counter market; or

          o    through the writing of options.

     In connection with sales of shares of common stock, the selling stockholder
may:

          o    enter into hedging transactions with broker-dealers, which may in
               turn engage in short sales of the shares of common stock in the
               course of hedging the positions they assume;

          o    sell short and deliver shares of common stock to close out the
               short positions; or

          o    loan or pledge shares of common to broker-dealers that in turn
               may sell the shares.

         The selling stockholder may sell its shares at market prices prevailing
at the time of sale, at prices related to such prevailing market prices, at
negotiated prices, or at fixed prices.

         The selling stockholder may use underwriters, broker-dealers or agents
to sell its shares. If this happens, underwriters, broker-dealers or agents will
either receive discounts or commissions from the selling stockholder, or they
will receive commissions from purchasers of shares for whom they acted as
agents.

         The selling stockholder also may resell all or a portion of the shares
in open market transactions in reliance upon Rule 144 under the Securities Act,
rather than by means of this prospectus, provided it meets the criteria and
conform to the requirements of that Rule.

         If necessary to comply with the securities laws of any state, the
shares will be sold only through brokers or dealers. In addition, in some
states, the shares may not be sold unless they have been registered or qualified
for sale or an exemption from registration or qualification is available and is
complied with.

         Any broker-dealers who participate in a sale of the shares may be
deemed to be "underwriters" within the meaning of the Securities Act, and any
commissions received by them, and proceeds of any sales by broker-dealers as
principals, may be deemed to be underwriting discounts and commissions under the
Securities Act. If the selling stockholder is deemed to be acting as an
underwriter, it may be subject to statutory liabilities of the Securities Act.

         In addition, the selling stockholder and any other person participating
in the sale or distribution of the shares offered under this prospectus will be
subject to the Securities Exchange Act of 1934 and its rules and regulations,


                                       18


including, without limitation, Regulation M. These provisions may limit the
timing of purchases and sales of any of the shares. In addition, any person
engaged in a distribution of the shares may not simultaneously engage in
market-making activities during the period beginning when he or she becomes a
distribution participant and ending upon his or her completion of participation
in a distribution. All of these factors may affect the marketability of the
shares and the ability of any person or entity to engage in market-making
activities.

     Our common stock is currently listed on the Nasdaq National Market system
under the symbol "ARTX." We do not currently intend to list the shares of our
common stock on any other securities exchange.

                          DESCRIPTION OF CAPITAL STOCK

GENERAL

         Our authorized capital stock consists of 100,000,000 shares of common
stock par value $.01 per share, and 1,000,000 shares of preferred stock, par
value $.01 per share. As of June 15, 2003, 37,552,540 shares of common stock
were issued and outstanding, 555,333 shares of common stock were held as
treasury shares, and no shares of preferred stock were issued and outstanding.

         The additional shares of our authorized stock available for issuance
might be issued at times and under circumstances so as to have a dilutive effect
on earnings per share and on the equity ownership of the holders of our common
stock. The ability of our board of directors to issue additional shares of stock
could enhance the board's ability to negotiate on behalf of the stockholders in
a takeover situation but could also be used by the board to make a
change-in-control more difficult, thereby denying stockholders the potential to
sell their shares at a premium and entrenching current management. The following
description is a summary of the material provisions of our capital stock. You
should refer to our amended and restated certificate of incorporation, as
amended, and bylaws for additional information.

COMMON STOCK

         The holders of common stock are entitled to one vote for each share
held of record on all matters submitted to a vote of stockholders. Except as
required under Delaware law or the rules of the Nasdaq National Market, the
rights of stockholders may not be modified otherwise than by a vote of a
majority or more of the shares outstanding. Subject to preferences that may be
applicable to any outstanding shares of preferred stock, the holders of common
stock are entitled to receive ratably any dividends as may be declared by the
board of directors out of funds legally available for the payment of dividends.
In the event of our liquidation, dissolution or winding up, the holders of
common stock are entitled to share ratably in all assets, subject to prior
distribution rights of the preferred stock, if any, then outstanding. Holders of
common stock have no preemptive rights or rights to convert their common stock
into any other securities. There are no redemption or sinking fund provisions
applicable to the common stock. All outstanding shares of common stock are fully
paid and non-assessable.

PREFERRED STOCK

         Our board of directors has the authority, within the limitations and
restrictions stated in our amended and restated certificate of incorporation and
without shareholder approval, to provide by resolution for the issuance of
shares of preferred stock, and to fix the rights, preferences, privileges and
restrictions thereof, including dividend rights, conversion rights, voting
rights, terms of redemption, liquidation preference and the number of shares
constituting any series of the designation of such series. The issuance of
preferred stock could have the effect of decreasing the market price of the
common stock, impeding or delaying a possible takeover and adversely affecting
the voting and other rights of the holders of our common stock. At present, we
have no plans to issue preferred stock.


                                       19


STOCK OPTIONS

         As of June 15, 2003:

          o    options to purchase a total of 5,715,955 shares of common stock
               at a weighted average exercise price of $2.16 per share were
               outstanding, 5,131,032 of which were vested and exercisable
               within 60 days of the date of this prospectus, at a weighted
               average exercise price of $2.15 per share; and

          o    up to 4,215,147 additional shares of common stock may be issued
               under our various stock option plans.

WARRANTS

         As of June 15, 2003, there were outstanding warrants to purchase a
total of 8,421,209 shares of common stock at a weighted average exercise price
of $2.02 per share.

DEBT INSTRUMENTS

         As of June 15, 2003, there were outstanding debentures and promissory
notes convertible into a total of 4,626,471 shares of common stock at a weighted
average conversion price of $0.65 per share.

CERTAIN CHARTER PROVISIONS

         Provisions of our amended and restated certificate of incorporation may
have the effect of making it more difficult for a third party to acquire, or of
discouraging a third party from attempting to acquire, control of us. These
provisions could limit the price that certain investors might be willing to pay
in the future for shares of our common stock. These provisions:

          o    divide our board of directors into three classes serving
               staggered three-year terms;

          o    only permit removal of directors by stockholders "for cause," and
               require the affirmative vote of at least 85% of the outstanding
               common stock to so remove; and

          o    allow us to issue preferred stock without any vote or further
               action by the stockholders.

         The classification system of electing directors and the removal
provision may tend to discourage a third-party from making a tender offer or
otherwise attempting to obtain control of us and may maintain the incumbency of
our board of directors, as the classification of the board of directors
increases the difficulty of replacing a majority of the directors. These
provisions may have the effect of deferring hostile takeovers, delaying changes
in our control or management, or may make it more difficult for stockholders to
take certain corporate actions. The amendment of any of these provisions would
require approval by holders of at least 85% of the outstanding common stock.

                                  LEGAL MATTERS

         Lowenstein Sandler PC, Roseland, New Jersey will pass upon the validity
of the shares of common stock offered by this prospectus for us.

                                     EXPERTS

         Our consolidated financial statements for the fiscal years ended
December 31, 2002 and 2001, which have been incorporated by reference in this
prospectus, have been audited by independent accountants Kost Forer & Gabbay (a
member firm of Ernst & Young Global). Such financial statements have been so
included in reliance on the report of such independent accountants given on the
authority of such firm as experts in accounting and auditing.


                                       20


                    WHERE YOU CAN FIND ADDITIONAL INFORMATION

         We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission. You can read and
copy any materials we file with the Securities and Exchange Commission at its
Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549 and at
its regional offices located at The Woolworth Building, 233 Broadway, New York,
New York 10279 and at 175 West Jackson Boulevard, Suite 900, Chicago, Illinois
60604. You can obtain information about the operations of the Securities and
Exchange Commission Public Reference Room by calling the Securities and Exchange
Commission at 1-800-SEC-0330. The Securities and Exchange Commission also
maintains a Website that contains information we file electronically with the
Securities and Exchange Commission, which you can access over the Internet at
http://www.sec.gov.

         This prospectus is part of a Form S-3 registration statement that we
have filed with the Securities and Exchange Commission relating to the shares of
our common stock being offered hereby. This prospectus does not contain all of
the information in the Registration Statement and its exhibits. The Registration
Statement, its exhibits and the documents incorporated by reference in this
prospectus and their exhibits, all contain information that is material to the
offering of the common stock. Whenever a reference is made in this prospectus to
any of our contracts or other documents, the reference may not be complete. You
should refer to the exhibits that are a part of the Registration Statement in
order to review a copy of the contract or documents. The registration statement
and the exhibits are available at the Securities and Exchange Commission's
Public Reference Room or through its Website.

                     INCORPORATION OF DOCUMENTS BY REFERENCE

         The Securities and Exchange Commission allows us to "incorporate by
reference" the information we file with it, which means that we can disclose
important information to you by referring you to those documents. The
information we incorporate by reference is an important part of this prospectus,
and later information that we file with the Securities and Exchange Commission
will automatically update and supersede some of this information. The documents
we incorporate by reference are:

          o    the description of our common stock contained in our registration
               statement on Form 8-A, Commission File No. 0-23336, as filed with
               the Securities and Exchange Commission on February 2, 1994;

          o    our Annual Report on Form 10-K, as amended, for the year ended
               December 31, 2002;

          o    our Quarterly Report on Form 10-Q for the quarter ended March 31,
               2003; and

          o    our Current Reports on Form 8-K filed with the Securities and
               Exchange Commission on April 4, 2003 and May 12, 2003.

         All reports and other documents that we file with the Commission under
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
prospectus but before the termination of the offering of the common stock
hereunder will also be considered to be incorporated by reference into this
prospectus from the date of the filing of these reports and documents, and will
supersede the information herein. We undertake to provide without charge to each
person who receives a copy of this prospectus, upon written or oral request, a
copy of all of the preceding documents that are incorporated by reference (other
than exhibits, unless the exhibits are specifically incorporated by reference
into these documents). You may request a copy of these materials, at no cost, by
telephoning us at the following address:


                                       21


        ELECTRIC FUEL CORPORATION (DOING BUSINESS AS AROTECH CORPORATION)
                                  632 Broadway
                            New York, New York 10012
                       Attention: Chief Executive Officer
                                 (646) 654-2107

         You should rely only on the information in this prospectus and the
additional information described under the heading "Where You Can Find More
Information." We have not authorized any other person to provide you with
different information. If anyone provides you with different or inconsistent
information, you should not rely upon it. Neither we nor the selling stockholder
are making an offer to sell these securities in any jurisdiction where the offer
or sale is not permitted. You should assume that the information in this
prospectus was accurate on the date of the front cover of this prospectus only.
Our business, financial condition, results of operations and prospects may have
changed since that date.




                                       22





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                                 563,971 SHARES
                                  COMMON STOCK


                              [ELECTRIC FUEL LOGO]






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                                   PROSPECTUS
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                                 AUGUST 5, 2003



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