PART A: Upcoming Events

Following the success of last year's exhibition, Environment 2001, plans are now underway for the Second International Exhibition for Environmental Technologies. This event promises to bring under one roof an even greater number of green technologies, companies and specialized seminars. With the World Summit on Sustainable Development taking place just around the corner, the emphasis on adapting technologies and industrial processes to suit environmental requirements has never been greater. Our limited land resources demand the accelerated development of technologies for recycling, rapid waste collection and exploitation of the biogas produced by organic waste. The battle to reduce air pollution has led to significant developments in the fields of legislation, regulation and technology. Ground contamination, caused by industry and various other polluters, requires prompt advanced solutions to prevent further pollution and treat contaminated areas throughout Israel.

2. Telecom Israel 2002

Exhibition Park, Tel Aviv, 4-7 November, 2002.

The Israeli telecom market has, for a long time, been a target for investments from the world's leading hi-tech companies. International telecom giants understood it long ago, joined, and still join in the success.
The indicators of the Israeli telecom market, today, are wonderful by any standard - beginning with the cellular penetration rate, which is today over 80%, with monthly minute rate being among the world's highest (over 300 minutes per month), to the cable network, to which more than 90% of homes are connected, and which nowadays is becoming fully digital.
No doubt, Israel is a unique telecom phenomenon in the world.
A global crisis in the hi-tech industries, an especially severe world crisis in the telecommunication markets, and the international terror crisis - all of the above did not change the basic fact: the Israeli telecommunication market is a dazzling success story.
Telecom Israel 2002 is designed to draw focus to this success story.
In Telecom Israel 2002, the Israeli telecom industry will introduce its most recent innovations to the international telecom community.
The Telecom Israel 2002 events will include an International Exhibition, in which the world's biggest producers and leading service providers will participate, and a professional interdisciplinary conference, which will be comprised of key note speeches, panels, discussions and workshops, with the guidance and participation by leaders of the world telecommunication community, analysts, and regulators.

3. Agritech Israel 2003

The Israel Trade Fairs & Convention Centre, Tel Aviv, 19-22 May, 2003.

The agriculture industry is one of Israel’s most important economic and cultural possessions. The field of agriculture symbolises not only the fundamental relationship of the Israeli pioneers to the land, but is a showcase for the great achievements and originality of Israeli scientists. Agritech is regarded nowadays as one of the most important agricultural exhibitions in the world. Evidence of this is provided by the thousands of visitors who come to the Exhibition every three years from all corners of the world, despite the hardest times that this country has gone through.

This year’s exhibition will include:

An International Conference on: "Agriculture and Environmental Aspects"

A Seminar and Guided Tour on: "The Latest Innovations in Green House Technology", and

An International Conference on: "New Trends in Irrigation & Water Management"

PART B: New Products and Innovations from Israel

B1. IT&T

1. First Comprehensive Intelligence Solution to Combat Cyber Attacks Delivered by Check Point and SANS Institute

Check Point Software Technologies Ltd. (Nasdaq:CHKP), the worldwide leader in securing the Internet, and the SANS Institute, a cooperative research and education organization for security professionals, today announced a collaboration that integrates Check Point's SmartDefense(R) with SANS Internet Storm Center to enhance Internet security by providing organizations and government agencies with the first comprehensive intelligence solution to combat cyber attacks. The integrated solution will help implement a key objective in the White House National Strategy to Secure Cyberspace being announced tomorrow at Stanford University -- that of a private-owned analysis and warning system or cyberspace network operations center to detect incidents at their earliest inception, respond to them efficiently, and to the best extent possible, anticipate them in advance. The integration of Check Point SmartDefense with the SANS Internet Storm Center will deliver two key capabilities. The first gives security administrators the option of automatically and anonymously submitting information on attack data collected from Check Point VPN-1(R)/FireWall-1(R) gateways running SmartDefense to SANS Storm Center for incidence reporting. Storm Center will collect and correlate this data, compare to SANS' list of attackers and provide a consolidated worldwide list of top attacks and attackers. The second capability enables real-time attack protection by allowing customers to automatically block traffic from IP addresses listed as known attackers and implement automatic policy updates based on SANS attack information. This integrated solution provides comprehensive attack protection and decreases incidence response time from days and weeks to seconds.

2. Check Point Software Unveils New SmartLSM

Check Point Software Technologies Ltd. (Nasdaq:CHKP), the worldwide leader in securing the Internet, today introduced SmartLSM (Large Scale Manager), the industry's first solution that enables enterprises to easily scale, deploy and manage VPN's and security for up to one thousand franchise locations. SmartLSM extends Check Point's industry-leading SMART Management architecture, enabling simple, scalable management for very large distributed networks and dramatically reducing total cost of ownership. Check Point's SmartLSM uses a unique profile-based approach, enabling a single security policy to be defined and associated with thousands of distributed VPN and firewall gateways. When the VPN/security policy needs updating, the security manager simply adjusts the profile and each dynamically addressed IP (DAIP) gateway automatically "fetches" the updated policy from the management server. This revolutionary approach to securing very large distributed networks eliminates the need to interact with hundreds of gateways one at a time, resulting in a dramatic increase in efficiency and cost savings. Additionally, configuring one profile versus a thousand gateways individually greatly reduces the chance for human error and ensures consistent end-to-end security.

3. ECI Telecom's Enavis Networks Launches T::CORE; Industry's First Global Intelligent Optical Switch

Enavis Networks, an ECI Telecom company, (Nasdaq: ECIL), presents T::CORE(TM), the industry's first global intelligent optical switch, at NFOEC 2002. T::CORE features an advanced, highly flexible and scalable architecture that enables carriers to simplify network operations, enhance network performance, reduce capital expenses, introduce new services and transport high-capacity broadband services from legacy SONET/SDH networks to the optical domain - regardless of geographical boundaries or standards environment. T::CORE will be available for customer trials by the end of the year. T::CORE's breakthrough architecture delivers unmatched system density by incorporating in a single system a broad range of network-enhancing features, including: full utilization of matrix resources for all traffic rates; a SONET/SDH global services platform allowing seamless global gateway functionality; consolidation of multiple network elements such as digital cross-connects; enabling Gigabit Ethernet (GbE) services over TDM. The inherent scalability and flexibility of the system's architecture offers a low initial deployment cost and enables carriers to scale incrementally with no service interruptions as traffic needs grow.

4. Mercury Interactive Announces Industry's First Business Technology Optimization (BTO) Products

Mercury Interactive Corporation (Nasdaq: MERQ), today took a significant step

forward in tangibly addressing a top CIO priority to better align the performance of IT to meet business goals with the introduction of Optane(TM), the industry's first Business Technology Optimization (BTO) product suite. Mercury Interactive's BTO strategy is in response to the increasing pressure on IT to maximize business process quality in the face of shrinking budgets and organizational complexity. BTO applies quality management principles to IT, to dramatically improve an enterprise's ability to continuously measure, maximize and manage the quality of IT-enabled business processes to produce business results, while reducing the overall cost of technology. With BTO, companies can optimize the substantial technology investments made over the last three to five years, thereby lowering the cost of IT and enabling the funding of new initiatives. Unlike earlier attempts to improve business processes that became costly and time consuming, BTO can be implemented incrementally to realize a return on investment in days and weeks

instead of months and years.

5. Mercury Interactive Announces First Interactive Digital Cockpit to Align IT And Line of Business

Mercury Interactive Corporation (Nasdaq: MERQ), the global leader in business

technology optimization, today announced Topaz(TM) Business Availability. It

is the industry's first interactive digital cockpit that surfaces vital performance indicators of mission critical applications in production in real-time. Topaz Business Availability aligns both IT and business executives within the enterprise by presenting a shared common view of how IT operations are meeting line of business goals. For the first time, IT is able to prioritize response according to business impact and optimize resource utilization to maximize business results. Unlike traditional systems management consoles, Topaz Business Availability goes beyond isolated network and system monitoring by mapping the technology enabled applications to the business. The digital cockpit provides an interface that presents aggregated end-user and IT performance metrics mapped onto mission critical business services within a company. These metrics are collected from a variety of data sources ranging from Topaz's unique end-user customer facing applications and back-end monitors to industry enterprise management systems including Web services or various APIs. These metrics are presented in real time to provide an accurate picture of service

levels IT is delivering to each line of business.

6. Optibase Unveils New Video Streaming Solutions At IBC 2002

Optibase, Ltd. (Nasdaq:OBAS) a leader in broadband streaming platforms, will showcase a range innovative video streaming solutions at the International Broadcasting Convention (IBC) in Amsterdam September 13-17, 2002. Optibase will unveil MGW 2400, a high density, multi-channel Microsoft Windows Media video encoding and streaming server. MGW 2400 is designed to compress and stream (multicast or on-demand unicast) up to six high quality Windows Media compliant streams and targets the enterprise and residential markets for high quality, low bit rate applications. When combined with a Windows Media Player, MGW 2400 enables large companies and organizations to stream TV to desktop PC users for applications such as Business TV. Broadband Internet Service Providers will be able to deploy the MGW 2400 solution for streaming entertainment channels over Digital Subscriber Lines (DSL) to home PCs.

B2. Biotechnology

1. Technique to Induce Cancer Cells to ‘Commit Suicide’ Developed by Hebrew University Scientists .

A new technique for tricking cancer cells into “committing suicide” and thus preventing their spread has been developed by researchers at the Hebrew University of Jerusalem. Their work is described in the September issue of Nature Biotechnology, which was published this week in its Internet version. The technique involves the engineering of a virus that will induce the cancer cell to behave in a manner similar to that of normal cells that are under attack. In normal cells which have been attacked by a virus, a protein known as PKR is activated as the result of RNA replication within the affected cell. This protein causes the cell to destroy itself, thus preventing the spread of the virus. Normally, PKR stays dormant, doing nothing unless the cell is provoked by an invading virus. Graduate student Alexei Shir (who has since earned his Ph.D.), together with his advisor, Alexander Levitzki, who is Wolfson Family Professor of Biochemistry at the Alexander Silberman Institute of Life Sciences at the Hebrew University, devised a strategy designed to “trick” cancer cells into activating PKR without activating it in normal cells. Shir and Levitzki developed a technique which involves the engineering of a unique virus, from the same family as the HIV virus, which can be “smuggled” into the cancer cells. This virus, in turn, triggers the PKR activation in the cancerous cells – which otherwise would not occur – and induces them to die, much as ordinary cells would when attacked by a virus. The virus developed by the Hebrew University researchers is directed specifically against an especially virulent brain tumor cancer and is not harmful to normal cells. This represents a significant improvement over current chemotherapy treatments, which kill cancer cells but also have harmful effects on normal cells. A start-up company, Algen Biopharmaceuticals, has been established by the Yissum Research Development Co. of the Hebrew University, together with Prof. Levitzki and investors, to further develop this technology. Prof. Levitzki cautioned that a great deal of laboratory and clinical work remains to be done before this technique will be able to be implemented in treatment of cancer patients.

2. Solar surgery hots up

In Israel's sizzling Negev Desert, scientists have been carrying out the first trials of solar surgery - burning tissue with concentrated sunlight. Sunbeams could one day shrivel burn away tumours, offering an alternative to laser surgery. The technology could also offer a cut-price way to harness solar power, by concentrating sunlight onto small solar panels. A curved, plate-sized dish focuses sunlight into a point, concentrating it up to15,000-fold. The dish bounces the light into a fibre-optic cable, which could carry the beam from a hospital roof to the operating theatre. Gordon thinks the dish could provide a cheap alternative to laser equipment - particularly for developing countries. "Most patients are deprived because of price," says Gordon. A laser unit costs more than US$100,000; the solar set-up, which includes off-the-shelf parts, is nearer $1,000. The dish could also cut the cost of solar-generated electricity, the team hope. Existing solar cells convert sunlight directly into electricity. They are efficient, but their semiconductor materials are pricey. Focusing a large amount of sunlight onto a tiny chip should slash the price, says Gordon. Much research is underway on concentrating sunlight in this way.

3. Identa Drug Detection Kits In Chile

Identa Corp. will start field tests of its narcotic drug detection kits with three national authorities in Chile. The company produces four kits containing patented reagents, each testing for the drugs marijuana/hashish, cocaine/crack, heroin, or ecstasy (MDMA). It is estimated that the potential market size for the kits to the law enforcement agencies in Chile alone is approximately 75,000-90,000 kits per year. The Identa kits introduce fast and highly accurate field drug identification results, for private use in the home and office as well as in the field by professionals. The company`s kits provide many advantages to the kits currently on the market, which are being used by the national authorities in Chile. Identa`s kits do not give ``false positive`` results, are easier and simpler to use than existing kits and are more time efficient for getting definite results within seconds. In addition, the kits can be used to detect minute amounts of drugs.

PART C: News about Israeli Companies

C1. Israeli Companies with Local Offices in Australia

1. Sensis extends outsourcing agreement with Amdocs

Billing company Amdocs and Sensis, a wholly-owned subsidiary of Australian telecommunications company Telstra that provides advertising, information, and directories services, announced a five-year outsourcing agreement today as an extension of their existing outsourcing agreement through to 2007. Under the agreement, Amdocs will continue to provide Sensis with an outsourcing solution for complete data center and facility management, software maintenance, and support services for existing and future advanced solutions and products. Amdocs has provided full outsourcing support for Sensis' Yellow Pages and White Pages systems since 1998. For Amdocs, this is a very important contract, since it opens up the potential for a broader relationship with Telstra, which has about 14 million subscribers in Australia and many subsidiaries in the Asia-Pacific region. Telecommunications is still a growing sector in this region, even while the global industry is mired in crisis. The contract was originally due to end in June 2004, but it was extended thanks to the original ideas Amdocs presented to Sensis.

2. Cable & Wireless selects Amdocs

Global telecommunications group Cable & Wireless (NYSE: CWP) and Amdocs (NYSE: DOX), the world's leading provider of billing and customer relationship management systems (‘CRM’) to the communications industry, today announced that Cable & Wireless Regional, a division of Cable & Wireless which offers a full range of telecommunications services in 33 countries, will implement Amdocs Ensemble for end-to-end billing and customer care for its majority owned mobile operations in the West Indies and Macau. Cable & Wireless Regional also has an option to implement Amdocs Ensemble for its mobile operations in Panama and its fixed operations in the West Indies, Macau and Panama. Amdocs comprehensive solution will allow Cable & Wireless Regional enhanced operational efficiencies, creating a single billing platform for current mobile and future next generation data services. Amdocs Ensemble billing platform will provide Cable & Wireless Regional with a comprehensive, highly scalable solution for its billing and payment processes. This complete solution will fully integrate Cable & Wireless Regional's mobile operations and services onto a single billing platform. Amdocs will provide Cable & Wireless Regional with advanced customer hierarchy capabilities, as well as enable the launch of flexible services and price plans, and support next generation voice and data services. Additionally, it will provide Cable & Wireless Regional with maintenance and application management services for a six-year period.

3. Thai mobile operator TA Orange selects Amdocs Ensemble platform

Amdocs announced today that Thai mobile phone operator TA Orange had deployed its Ensemble customer care and billing platform. Amdocs did not disclose the value of the deal. TA Orange is building a nationwide 1800 MHz communications network to deliver 2.5G services to its customers in Thailand under the Orange brand name.

Amdocs is providing TA Orange with a billing platform for all its GSM services. The platform will enhance existing and future revenue streams, support the rapid implementation of future GPRS data services and retain the Orange brand for quality and service, Amdocs says.

4. IAI collaborating with Ukrainian companies to upgrade aircraft

Israel Aircraft Industries (IAI) will cooperate with several Ukrainian companies in upgrading airplanes. The airplanes will be offered to customers around the world. IAI's Lahav division signed an agreement with Avirs, owned by the Ukrainian Air Force; Progress; and Motor-Sich to upgrade the L-39 training aircraft. The Ukrainian Air Force plant has accumulated know-how in operating these Czech-manufactured trainers, while the other two companies specialize in the planes' engines. The consortium's upgrade includes improvements in the trainer's systems and engine, and the integration of advanced avionics systems, based on know-how accumulated by Lahav in other aircraft upgrading projects. The avionics package includes an advanced cockpit, head-up display, radar, central computer, flight debriefing system and satellite navigating system.

5. Bouyges Telecom launches MMS service based on Comverse system

Bouyges Telecom is the first company to provide Multimedia Messaging Services (MMS), based on Comverse Technology’s system, Comverse announced today. Bouyges is France’s third-largest cellular operator, and received its 3G license in September. The MMS is suitable for 2.5G GPRS networks, allowing subscribers to send and receive text, color picture and voice messages, send digital photographs with voice attachments, and with voice and picture storage options. Bouyges has opened a multimedia library for its subscribers. Comverse also announced that Bouyges is offering its subscribers Ericsson T68i MMS-capable cellular telephones. Comverse’s system will enable Bouyges 200,000 WAP subscribers to enjoy advanced Internet applications for mobile telephones. The system will also allow mobile telephone users to send content to subscribers’ contacts by WAP-Push. This capability allows cellular communications operators to proactively market various services through SMS. In this way, the operators can also increase their subscribers’ airtime, thereby increasing their revenue per user.

6. Comverse partners with Telefonica Moviles

Mobile phone operator Telefonica Moviles announced today that it had selected Israeli communications software provider Comverse as a global technological partner for messaging solutions. The global framework agreement allows Telefonica Moviles’s operating companies around the world to use Comverse messaging solutions, which integrate voicemail, unified messaging and voice-controlled dialing. Telefonica Moviles Espana, the group's domestic Spanish operator, has already replaced part of its existing voicemail systems with Comverse's voice multi-service platform, which serves more than four million of the Spanish company's more than 18 million subscribers. At the same time, the accord allows Telefonica Moviles to provide input into the design of new messaging solutions, in order to tailor the services to suit the needs of the group's operators.

7. Comverse wins voice mailbox contract in Czech Republic

Comverse Technology subsidiary Comverse has won a Czech Telecom contract for voice mailboxes, worth a few million dollars. The sources added that Comverse will supply Czech Telecom with 600,000 voice mailboxes. Comverse’s systems will replace obsolescent Unisys systems. Czech Telecom recently replaced all telephone numbers in the country, which forced it to upgrade its voice mailbox system to suit the new numbers. The company had two alternatives: upgrade its existing Unisys system, or buy a new one. Upgrading existing systems is usually cheaper, but in this case, Comverse offered a lower price than the upgrade. It is not known how much Comverse will charge for each voice mailbox, but it is known that it is very low. This probably means the total deal will not be worth more than $5 million.

8. Germany’s T-Mobile buys Comverse call return service

Communications services developer Comverse Technology (Nasdaq: CMVT) today announced that T-Mobile Germany was implementing its call return service. The value of the deal was not disclosed. The service integrates a call-back option into the voicemail system and is expected to generate additional revenues by increasing call traffic.

9. US insurer starts reimbursement coverage of Given Imaging diagnostic system

Given Imaging reports its “camera-in-pill” device has received hospital outpatient reimbursement coverage by New Jersey and Tennessee Medicare. Riverbend Government Benefits Administrator, a Medicare Fiscal Intermediary, will cover use of the pill in an outpatient hospital setting for the states of New Jersey, Tennessee and in rural health clinics in 44 other states, Given said today. The reimbursement is expected to cover costs of using the workstation, Given’s M2A capsule, nurse time and all facility resources. This coverage is in addition to the physician reimbursement already established by Medicare in New Jersey, Given said.

10. Bahamas telco buys ECI Telecom international gateway solution

ECI Telecom’s optical systems division Enavis Networks said today that Bahamas Telecommunications Company (BaTelCo) had selected its international gateway and bandwidth management system. Enavis said the solution, called TDAX, would allow BaTelCo to reduce costs of providing global connections via its established underwater fiber-optics cable system. The value of the deal was not disclosed.

BaTelCo chief operations officer and vice president/operations Leon Williams said, "The Enavis international gateway is a cost-efficient solution for ensuring that we continue to provide our customers with the high-quality global connectivity they require. The solution also provides superior bandwidth management and grooming capabilities, which are essential for reducing network operating costs and introducing new, revenue-generating services."

11. US utility selects ECI Telecom optical network platform

ECI Telecom’s optical networking unit Lightscape Networks today announced that JEA, the eighth largest municipal utility in the US, had selected its XDM optical platform. ECI said JEA would use the XDM device to upgrade its communications network in Jacksonville, Florida. The value of the deal was not disclosed, although ECI did say that the multi-phase project would provide flexible transport and switching of SONET, gigabit ethernet and fiber channels over metro fiber optic communications (DWDM). Under the deal, Lightscape Networks' XDM platforms will be deployed in multiple sites to carry existing SONET traffic and storage area network services. According to ECI, the project will allow JEA to improve network capacity, increase breadth of services and keep up-front capital costs at a minimum.

The JEA utility win follows Lightscape Networks’ recent announcement that the State Power Corporation of China had selected its XDM optical platform to develop its metro network for ventures including Beijing's Three Gorges Project.

12. ENTEL Chile selects ECI Telecom's Lightscape for its international network

Optical networking company Lightscape Networks, an ECI Telecom subsidiary (ECI Telecom: Nasdaq:ECIL), today announced that ENTEL Chile, an Italia Telecom subsidiary, selected Lightscape Networks' XDM(TM) converged optical networking platforms for deployment in its international network. The network will initially connect New York and Miami to several cities throughout Latin America. ENTEL Chile, which had already been using Lightscape Networks' BroadGate(TM) (micron)SDM-1 equipment in their network, has added the XDM to support an increase in traffic over the past six months. Under the agreement, Lightscape Networks' flagship XDM hybrid optical platform will be used to create an international traffic network that will connect several offices, branches and subsidiaries in North, Central and South America. The initial implementation will be used to carry traffic to and from New York, Miami and several Latin American cities including Caracas, Lima, Salvador, Guatemala and Santiago. The XDM is a fully converged optical platform combining optical DWDM, next-generation SDH/SONET and carrier-class Gigabit Ethernet with on-demand network provisioning in a single device. In addition, the XDM's "Build-as-you-Grow(TM)" architecture lets service providers easily expand their networks to meet customers' bandwidth and service demands, enabling the most cost-effective network migration path without the added costs of multiple network elements.

13. VocalTec finalizes $1.4m deal with Thai telecom operator

VocalTec Communications, a provider of packet voice solutions for telecom carriers, announced on Monday that it had finalized a $1.4 million deal with the Communication Authority of Thailand (CAT). Under the deal, VocalTec will provide its network equipment to government-owned CAT, the sole provider of international voice services in Thailand. VocalTec will implement a packet voice network for CAT that will support both prepaid and postpaid international long distance calling services. The equipment will be installed in 16 points of presence (POPs) throughout Thailand.

14. Asia’s largest satellite operator selects Gilat technology

Gilat Satellite Networks announced on Tuesday that it had been selected by JSAT Corporation, Asia’s largest satellite operator, to install a two-way satellite communications network in Japan. JSAT intends to use Gilat’s VSAT (Very Small Aperture Terminal) technology to provide shared-hub services to companies in a variety of industries throughout Japan. JSAT supplies communications and broadcasting services through eight satellites positioned in seven orbital slots.

15. Gilat Receives Order from Star One for Additional 2,000 SkyBlaster 360 VSAT Terminals

Gilat Satellite Networks Ltd. (Nasdaq: GILTF) today announced that its Brazilian customer, Star One, has expanded its broadband satellite network by adding 2,000 SkyBlaster 360 VSAT terminals to its existing network of 3,700 VSAT terminals. The additional VSATs will allow Star One to expand its services of broadband Internet access for consumers and small businesses throughout Brazil. The delivery of the new VSAT units is immediate. In May of 2001, Gilat and Star One entered into an agreement to provide Brazil's first consumer, two-way satellite broadband Internet service. The service offers always-on, high-speed Internet access to selected consumer markets and small office/home office (SOHO) users in Brazil. Star One is a partnership of Embratel (NYSE: EMT; Brazil's largest telecommunications company) and satellite operator SES GLOBAL.

16. Gilat wins $10m Tibet satellite deal

Gilat Satellite Networks (Nasdaq: GILTF) said it had clinched a $10 million contract to build a satellite network for up to 5,000 public telephones in the mountainous region of Tibet, Reuters reported today. Under the deal, Gilat would build about 1,300 satellite-linked remote communications stations that would connect initially 4,000 to 5,000 telephones, said the company's general manager for China, Osvaldo Bergstein. China's fixed-line carrier China Telecom would operate the actual Tibetan telephone network, Bergstein said. Satellite communications firms like Gilat argue their technology is ideal for use in China's remote western hinterland, where harsh landscapes and scattered communities complicate the building of communications infrastructure. Poor and far-flung areas where revenues are unlikely to make up the cost of building expensive phone networks are traditionally a burden on carriers such as China Telecom, Reuters said. Gilat's Tibetan scheme follows a project in China's western region of Xinjiang, where it already maintains 1,050 remote stations operating three to four telephones each. Bergstein told Reuters that prospective phone users in Tibet would pay about one yuan (12 US cents) per minute -- several times higher than a fixed-line phone call. Gilat is also working with a domestic service provider on linking up China's postal service with more than 1,000 remote satellite stations, the report stated.

17. Gulf Oil Selects Gilat's Spacenet Subsidiary to Provide VSAT Satellite Communications Network to Serve Retail Petroleum Locations

Gilat Satellite Networks Ltd. (Nasdaq: GILTF) today announced its U.S. subsidiary, Spacenet Inc., has been selected by Gulf Oil to provide a high-speed satellite communications network to serve its dealers who wish to upgrade their credit authorization and pay-at-the-pump capabilities. Gulf distributes motor fuels through a network of 1,800 Gulf-branded gas stations and independent retailers throughout the northeastern United States. Under the terms of the agreement, Gulf dealers across the nation will be able to use Gilat's Skystar Advantage network to deploy fast credit/debit authorization and pay-at-the-pump services to minimize customer-waiting time. Because the VSAT network is not constrained by the reach of land lines, it can provide the same high level of service to every one of Gulf's retail locations - even those in remote areas.

18. Rafael to supply cannons to Australian navy for $50m

Rafael (the Israel Armament Development Authority) won a Australian Ministry of Defense tender to supply cannons for warships for $50 million over 15 years.

Minister of Transport Ephraim Sneh, Deputy Minister of Defense in the Barak government, helped out in Rafael's marketing efforts by discussing the matter with Australia Minister of Defense Robert Hill during Sneh's visit to Canberra last month.

The Australia Ministry of Defense said it had decided to procure Rafael-made 25mm stabilized weapon system, the Typhoon Mk 25, for the Australian navy's future patrol boats. Rafael competed against three international companies in the final stage of the tender. Rafael will cooperate in the project with General Motors Defense Australia, which will be responsible for building major parts of the systems, under license from Rafael. The manufacturing will take place in Adelaide, except for the first system, which will be manufactured solely in Israel.

19. Independent Study: Check Point Beats Cisco and NetScreen Performance by a 5X Factor in Real World VPN Tests

Check Point Software Technologies Ltd. (Nasdaq:CHKP), the worldwide leader in securing the Internet, today announced that The Tolly Group, a leading testing lab, confirmed Check Point's position as the VPN and firewall performance leader by outperforming competing enterprise-class solutions from Cisco Systems Inc. (Nasdaq:CSCO) and NetScreen Technologies Inc. (Nasdaq:NSCN) in real-world environments. The complete test can be found at http://www.checkpoint.com/products/connect/tollyreport.html

Test results concluded: Check Point VPN-1 Pro delivered the highest overall real-world VPN throughput of 260 Mbps, outperforming NetScreen's and Cisco's best results by 277 percent and 294 percent, respectively; Check Point VPN-1 Pro outperformed NetScreen by 57 percent for real-world firewall traffic; Check Point VPN-1 Pro is 400 percent faster than Cisco and NetScreen under heavy traffic scenarios with small packet VPN traffic conditions. The Tolly Group also calculated a cost-per-megabit of throughput for the three devices tested, and the VPN-1 Pro's cost-per-megabit of throughput is $21.37 versus more than $73 for the NetScreen 500 and more than $90 for the Cisco PIX 535. Check Point performed even better in cost performance per megabit for the VPN tests. The solutions were priced at $16,000 for Check Point VPN-1 Pro, $35,000 for NetScreen 500 and $66,000 for the Cisco PIX 535.

20. Check Point Software Receives Special Honor from NASA

Check Point Software Technologies Ltd. (Nasdaq:CHKP), the worldwide leader in securing the Internet, today announced that NASA/Marshall Space Flight Center has presented a special commendation to the company for outstanding support in implementing Check Point solutions -- deemed mission-critical for secure, reliable communication between the Space Station and numerous sites on Earth.
NASA was challenged with maintaining reliable VPN performance and connectivity between the Space Station and multiple sites on Earth while utilizing a proprietary, demand-intensive voice over IP (VoIP) application. NASA's VoIP application enables 200 simultaneous users to participate in a VPN session, each running eight active audio conferences -- requiring a level of performance unheard of for traditional environments and critical for Space Station research teams. To solve this, NASA leveraged Check Point's SecureXL(TM) acceleration solution, complemented by outstanding technical services and existing VPN-1(R) Pro. SecureXL boosted VPN performance by 60 fold, enabling NASA to easily and efficiently facilitate communication between the Space Station team and multiple global sites while leveraging the cost-efficiency and security of their Check Point VPNs.

21. Optane -- An End-to-End Solution for the Real Time Enterprise

Mercury Interactive has long enjoyed a market-leading position in pre-production with its enterprise testing products LoadRunner(R), WinRunner(R), and Test Director(R). Over the past two years, Mercury Interactive has also become a market leader in production with its Topaz(TM) product family. In providing 24x7 solutions for production, Mercury Interactive identified a market need for a "tuning" middle level that bridges the gap between pre-production and production, and has pioneered the

industry's first tuning family of products and services, including ActiveTune(TM) and ProTune(TM). Results from tuning, which proactively optimizes the production infrastructure for specific applications, have been impressive. More than 3,000 customers have witnessed an average performance increase of 400 percent, most of which occurred without additional investments in hardware, software or network bandwidth. By providing the tuning missing link, Mercury Interactive is able to provide a single, cohesive product foundation and a unified process for BTO.

C2. Israeli IT&T News

1. Edusoft wins NIS 3.5m order from Peru

Israeli company Edusoft will supply software for teaching English and the natural sciences to Peruvian company Soclar and its Israeli partner, IDR International Marketing, over the next two years, for NIS 3.5 million. Edusoft develops interactive materials for English language learning, the sciences, and early childhood education. Soclar distributes educational software for a variety of educational projects in Peru.

The current deal is the second in Latin America reported by Edusoft in the past month. In the previous transaction, Edusoft agreed to supply similar programs to Positivo, the largest publisher in Latin America.

2. Emblaze subsidiary Orca to collaborate with Microsoft

Orca Interactive, a fully owned subsidiary of Emblaze Systems (LSE: BLZ), announced today that it has signed an agreement with Microsoft Corporation to jointly promote its RiGHTv software application solutions. Orca will enable its comprehensive suite of iTV services to be available on Microsoft SQL Server and Microsoft.NET server family platform. Microsoft has further agreed to promote Orca's iTV solutions to its existing customer base worldwide.

Orca’s announcement said that both companies would engage in an aggressive global co-marketing and co-selling activities in order to generate new revenue streams from promoting the combined solution for broadband interactive TV using Windows Media and other Microsoft platforms. Orca is expected to launch the first commercial rollout by end of the first quarter of 2003.

3. Scitex Digital Printing and EFI Partner on New Server for Transactional Printing; Fiery Color Server to Power Ultra-High-Speed Digital Printer

Electronics For Imaging (Nasdaq: EFII) and Scitex Digital Printing today announced a strategic agreement to jointly develop a custom Fiery(R) server to drive Scitex Digital Printing's next generation of ultra-high-speed Versamark(TM) Business Color(TM) printers. Targeted for the transactional document, data center and direct mail markets where complex variable data printing is increasingly critical, this high performance color server will drive Scitex Digital Printing's press at production speeds of 500 feet per minute or 2,000 color pages per minute. It will also feature EFI's acclaimed intuitive user interface, open standard variable data printing (VDP) and powerful color management and workflow productivity tools. The new Fiery-branded color server combines graphic arts and variable data capability and is slated for release in late 2003. The new Fiery server will support all standard file formats used by graphic arts and data centers, including PDF and PostScript(R), as well as support for standard and legacy VDP languages through EFI's open platform. It will also include Scitex Digital Printing's next generation VersaMark Business Color print technology. VersaMark systems are designed to handle very heavy-duty production, yielding more than 2,000 pages per minute with a low operation cost per page and capable of producing 100% variable data in black, spot color or CMYK process color.

C3. Other News

1. Ormat wins $42.8m New Zealand power station contract

Ormat Industries, which develops geothermal power stations, today announced it won a $42.8 million contract to set up a 39 megawatt power station in New Zealand's Mokai geothermal field. According to the announcement released by the company to Tel Aviv Stock Exchange today, this is the second project Ormat will supply to this particular client, after having built a 52 megawatt power station which has been operational for three years. The agreement now being formulated stipulates that the power station and related equipment will be supplied over a 19 month period from the day the contract is signed, which is expected to be in the third quarter of 2004. The order joins the company's handsome $1.74 billion current orders backlog.

2. Ambassador to Israel Yu Myung Hwan: Israel may be first to sign a free trade agreement with Korea

Korean Minister of State for Trade Hwang Doo-Yun will arrive in Israel on October 9 to open the discussions of the joint Israel-South Korea committee. He will also meet Prime Minister Ariel Sharon and Minister of Foreign Affairs Shimon Peres. The Israel-South Korea committee meets once a year with the aim of consolidating financial cooperation between Israel and South Korea. Minister of Industry and Trade Dalia Itzik will head the Israeli delegation. The talks will last three days, and are intended to pave the way for the signing of a free trade agreement between Israel and South Korea. While Israel has free trade agreements with some 30 countries, including the EU members and the USA, South Korea has not yet established such an agreement with any country, and only now is in advanced contact to that end with two countries: Chile and Israel. The governments of Israel and South Korea have not yet reached a final decision, but it is definitely possible that little Israel, for all that, will be the first free trade partner of the twelfth largest economy in the world.

3. Infinity about to close $60-75m second fund

The Israel Infinity Fund is about to close its second fund - Israel Infinity II. The fund will have an estimated $60-75 million. At the beginning of the year, Israel Infinity expanded its initial follow-up fund by $10 million to over $60 million. General Electric and another industrial firm invested $5 million each. The sources added that the fund is about to add 25 more start-ups from Clal Industries and Investments, which will retain large start-ups in which it has invested over the years. The start-ups being transferred to Israel Infinity include Saifun Semiconductors and Smart Link.

4. Israeli Arab and Jewish Incubator Funds Life Science

An Arab-Jewish high-tech incubator has opened in Nazareth. The site is opening with an initial investment of $1.4 million, funded by six Israeli Arab businessmen from the Galilee and an Israeli entrepreneur Davidi Gilo, who are in a partnership with the Center for Jewish-Arab Economic Development (CJAED). A substantial amount of the fund will be allocated to finding life science projects effectively bridging the gap between the Israeli Arab and the Israeli scientific communities. The first project will focus on dietary supplements, which may turn into a medical product in the future; said Sharon Devir, director of the incubator project. “We expect about half of the projects to be from the life sciences area,” he continued. The companies will be housed by the incubator in an 800 square meter site for the first two years in Nazareth.

5. Israel's per capita GDP 3rd among emerging markets in 2001

Despite its recession and falling standard of living, Israel is still among the top emerging markets in terms of GDP per capita. In this week's issue, “The Economist” ranked 25 emerging markets' GDP per capita, based on World Bank purchasing power parity (PPP) data. Israel was ranked third, after Hong Kong and Singapore.

"The Economist" states that Israel's GDP per capita was $19,330 in 2001, compared with $25,590 in Hong Kong and $24,910 in Singapore.

6. El Al to prepare prospectus on basis of 2002 financials

El Al plans to prepare a privatization prospectus, based on its 2002 financial statements. In July, the ministerial privatization committee, headed by Prime Minister Ariel Sharon, approved Minister of Transport Ephraim Sneh's plan to sell the state's holdings in El Al in stages. The decision changed former Prime Minister Benjamin Netanyahu's decision to sell only 49% of the airline. In the first stage, up to 49% of El Al will be sold on the Tel Aviv or an overseas stock exchange. The rest of the shares will be sold later, depending on the success of the process. The state will retain only the golden share.

7. The Turkish Ministry of Defense Announces the Entry Into Force of the Agreement to Upgrade Turkish Army M60A1 Tanks

Elbit Systems Ltd. (Nasdaq: ESLT), announced today that the Turkish Ministry of Defense announced the entry into force of the Turkish Government's agreement with Israel Military Industries Ltd. ("IMI") for the project to upgrade Turkish Army M60A1 tanks. The Company and IMI are working towards the completion of the contract to

be signed between them in connection with the project. The Company's portion

of the project is expected to be material to the Company.