The new solution will be based on VeriTouch’s Constellation SCS™ (Secure Cabin System) and BVR’s Emergency Situation Recognition and Awareness (ESRA) System.

The bundled solution will introduce a unique set of pre-flight and in-flight security modules for the protection of passengers, pilots, and crewmembers.  It will include VeriTouch’s proprietary fingerprint and iris recognition technology and BVRS’ real-time safety algorithms, high-resolution 3-D terrain databases and situation awareness technology to provide revolutionary safety features in the event of a terrorist attack.  In addition, it will provide external ground security checking procedures through the registration of passengers’, crew’s, and ground crew’s biometric data during pre-flight and surveillance and security checks for airport visitors and employees.  The solution is designed for countering sabotage to commercial aircraft prior to flight, as well as providing in-flight warnings and situation awareness to the air-crew and to ground facilities through datalink communication.

BVRS CEO Yoel Katzir commented, “We are pleased to announce the next step in the formalization of our working relationship with VeriTouch.  We have been exploring the possibility of penetrating this niche in the aviation security market and we believe that it poses market opportunities for both companies.  Our core technology and expertise in defense electronics make BVRS a natural fit for this application.”

Gary E. Brant, VeriTouch CEO, stated, “We are gratified for the support of our strategic partner, BVR Systems, in initiating the first enterprise security solution for the commercial aviation industry.  Combining airport facilities pre-flight biometric screening with real-time navigational counter-sabotage technologies will increase safety for passengers and crew.”

BVR Systems (1998) Ltd., (NASDAQ:BVRS), established in 1998 as an independent spin-off, is a world leader in advanced defense training and simulation systems. The Company is part of the Elisra Group and offers highly efficient, cost effective solutions for the simulation, training and debriefing needs of modern air, sea and ground forces. For more information visit the Company’s web site at:  http://www.bvrsystems.com.

VeriTouch Ltd. is a world leader in the development of advanced biometric security solutions.  Established in 1996 and based in New York City, VeriTouch’s products include bioCARD™, the world’s first mobile, wireless biometric identification system. An integrated component of Constellation SCS, bioCARD provides real time identification of individuals and secure messaging capability for commercial aviation, military, government, corporate, and healthcare applications.  For more information, visit: http://www.veritouch.com.

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This announcement and the websites referred to herein contain forward-looking statements, as such term is defined in the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are statements that include information about possible or assumed future developments or other circumstances.  Statements that use the terms “would”, “will” and similar expressions are intended to identify forward-looking statements.  All forward-looking statements in this announcement and such websites reflect current views about future events and are based on assumptions and are subject to risks and uncertainties.  Such risks include, but are not limited to the fact that changes in technology and market requirements; decline in demand for the our products; inability to timely develop and introduce new technologies, products and applications may adversely affect our results of operations; we may fail in realizing the benefit anticipated form co-operation with other players in the industry; our contracts may be terminated or suspended by our customers as a result of factors which may not depend on us; many of our customers would have the right to terminate orders by paying the cost of work in process plus a related profit factor;  loss of market share, pressure on pricing resulting from competition, and other factors as are described in Item 3 D (Key Information – Risk Factors) of our Form 20-F for the fiscal year ended December 31, 2000.  Consequently, actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors.  Except as required by applicable law, including the securities laws of the United States, we do not intend to update or revise any forward-looking statements.

Contacts:

Mimi Fuchs                                                  Gary E. Brant, C.E.O.  

BVR Systems (1998) Ltd.                            VeriTouch Ltd.

Tel. 011-972-3-900-8000                              Tel. 917-378-2525

 mimif@bvr.co.il                                             gb@veritouch.com

Rachel Levine/Marilena LaRosa

The Anne McBride Co.

Tel. 212-983-1702

rlevine@annemcbride.com / mlarosa@anemcbride.com