FOR IMMEDIATE RELEASE

CONTACT:

George Morgenstern, CEO
DATA SYSTEMS & SOFTWARE INC.
(201) 529-2026; (201) 529-3163 Fax
e-mail: ir@dssiinc.com

           --DATA SYSTEMS & SOFTWARE INC. ANNONCES DEFINITVE AGREEMENT
               TO SELL ITS INTEREST IN TOWER SEMICONDUCTOR LTD.--

Mahwah, New Jersey -- December 22, 1999 -- Data Systems & Software Inc. (NASDAQ:
DSSI) today  announced  that it has entered into a definitive  agreement to sell
all of its interest in Tower  Semiconductor  Ltd. (NASDAQ:  TSEMF) to The Israel
Corporation  Ltd., a publicly-held  Israeli holding company,  for  approximately
$30,889,000.

DSSI  currently  owns 60% of a holding  company  which holds  approximately  5.4
million Tower shares, or approximately 45% of Tower's  outstanding  shares.  The
Israel Corporation currently owns the other 40% of the holding company.

The closing of  transaction,  which is subject to approval of Israeli  antitrust
authorities,  certain additional consents and customary closing  conditions,  is
scheduled to occur in February 2000.

This press release  includes  forward-looking  statements,  which are subject to
risks and  uncertainties,  including risks associated with obtaining the consent
of  the  Israeli  antitrust  authorities  and  other  third  party  consents  in
connection  with the transaction  and  satisfaction  of all other  conditions to
closing. There is no assurance the contemplated sale will be consummated.

Data  Systems  &  Software  Inc.  is  a  provider  of  computer  consulting  and
development  services,  and is an  authorized  direct  seller  and  value  added
reseller of computer  hardware.  Through its Comverge  Technologies  subsidiary,
DSSI provides data communication and load management solutions to utilities.



                                      #####