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Exhibit 10.3

EXHIBIT A

REGISTRATION RIGHTS AGREEMENT

        This Registration Rights Agreement (this “Agreement”) is made and
entered into as of December 28, 2006, by and among Ampal-American Israel
Corporation, a company formed under the laws Israel (the “Company”) and the
investors signatory hereto (each a “Investor” and collectively, the
“Investors”).

        This Agreement is made pursuant to the Securities Purchase Agreement,
dated as of the date hereof among the Company and the Investors (the “Purchase
Agreement”).

        The Company and the Investors hereby agree as follows:

    1.        Definitions. Capitalized terms used and not otherwise defined
herein that are defined in the Purchase Agreement will have the meanings given
such terms in the Purchase Agreement. As used in this Agreement, the following
terms have the respective meanings set forth in this Section 1:

        “Advice” has the meaning set forth in Section 6(d).

        “Effective Date” means, as to the Registration Statement, the date on
which such Registration Statement is first declared effective by the Commission.

        “Effectiveness Period” has the meaning set forth in Section 2(a).

        “Exchange Act” means the Securities Exchange Act of 1934, as amended.

        “Filing Date” means the earlier of (i) the 60th calendar day following
the date that Shareholder Approval is obtained and (ii)July 28, 2007.

        “Holder” or “Holders” means the holder or holders, as the case may be,
from time to time of Registrable Securities.

        “Indemnified Party” has the meaning set forth in Section 5(c).

        “Indemnifying Party” has the meaning set forth in Section 5(c).

        “Losses” has the meaning set forth in Section 5(a).

        “New York Courts” means the state and federal courts sitting in the City
of New York, Borough of Manhattan.

        “Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.

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        “Prospectus” means the prospectus included in the Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by the
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.

        “Registrable Securities” means: (i) the Shares, (ii) the Warrant Shares
and (iii) any securities issued or issuable upon any stock split, dividend or
other distribution, recapitalization or similar event with respect to any of the
securities referenced in (i) or (ii) above.

        “Registration Statement” means the registration statement required to be
filed in accordance with Section 2(a), including the Prospectus, amendments and
supplements to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference therein.

        “Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

        “Rule 415” means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

        “Rule 424” means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

        “Securities Act” means the Securities Act of 1933, as amended.

        “Shares” means the shares of Common Stock issued to the Investors
pursuant to the Purchase Agreement.

        “Warrants” means the Common Stock purchase warrants issued or issuable
to the Investors pursuant to the Purchase Agreement.

        “Warrant Shares” means the shares of Common Stock issued or issuable
upon exercise of the Warrants.

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    2.       Registration.

    (a)       On or prior to the Filing Date, the Company shall prepare and file
with the Commission a Registration Statement covering the resale of all
Registrable Securities not already covered by an existing and effective
registration statement for an offering to be made on a continuous basis pursuant
to Rule 415, on Form S-3 (or on such other form appropriate for such purpose).
Such Registration Statement shall contain (except if otherwise required pursuant
to written comments received from the Commission upon a review of such
Registration Statement) the “Plan of Distribution” attached hereto as Annex A.
The Company shall use its reasonable commercial efforts to cause such
Registration Statement to be declared effective under the Securities Act and to
keep the Registration Statement continuously effective under the Securities Act
until the date which is the earliest of (i) five years after its Effective Date,
(ii) such time as all of the Registrable Securities covered by such Registration
Statement have been publicly sold by the Holders, or (iii) such time as all of
the Registrable Securities covered by such Registration Statement may be sold by
the Holders pursuant to Rule 144(k) as determined by the counsel to the Company
pursuant to a written opinion letter to such effect, addressed and acceptable to
the Company’s transfer agent and the affected Holders (the “Effectiveness
Period”). By 5:00 p.m. New York City time on the Trading Day immediately
following the Effective Date, the Company shall file with the Commission in
accordance with Rule 424 under the Securities Act the final prospectus to be
used in connection with sales pursuant to such Registration Statement (whether
or not such filing is technically required under such Rule). With respect to
each Holder, from the date of Closing until the date on which all of the
Registrable Securities that such Holder owns become freely transferable under
Rule 144(k) promulgated under the Securities Act, the Company agrees to use its
reasonable best efforts: (i) to make and keep public information available, as
those terms are understood and defined in the General Instructions to Form S-3,
or any successor or substitute form, and in Rule 144, (ii) to file with the SEC
all reports and other documents required to be filed by an issuer of securities
registered under Sections 13 or 15(d) of the Exchange Act, and (iii) if such
filings are not available via EDGAR, to furnish to such Holder as long as the
Holder owns or has the right to acquire any Registrable Securities prior to the
applicable termination date described above, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so filed
by the Company under Sections 13 or 15(d) of the Exchange Act as may be
reasonably requested in availing such Holder of any rule or regulation of the
SEC permitting the selling of any such Registrable Securities without
registration.

    (b)       If: (i) the Registration Statement is not filed on or prior to its
Filing Date (if the Company files the Registration Statement without affording
the Holders the opportunity to review and comment on the same as required by
Section 3(a) hereof, the Company shall not be deemed to have satisfied this
clause (i)), or (ii) if by the third Trading Day immediately following the
Effective Date the Company shall not have filed a “final” prospectus for the
Registration Statement with the Commission under Rule 424(b) (whether or not
such a prospectus is actually required by such Rule), (any such failure or
breach being referred to as an “Event,” and the date on which such Event occurs,
being referred to as “Event Date”), then in addition to any other rights the
Holders may have hereunder or under applicable law: on each such Event Date, and
on each monthly anniversary of each such Event Date (if the applicable Event
shall not have been cured by such date) until the applicable Event is cured, the
Company shall pay to each Holder an amount in cash, as partial liquidated
damages and not as a penalty, equal to 0.5% of the aggregate Investment Amount
paid by such Holder for Shares pursuant to the Purchase Agreement, up to a
maximum aggregate liquidated damages of 10% of the amount paid by such Holder.
The partial liquidated damages pursuant to the terms hereof shall apply on a
daily pro-rata basis for any portion of a month prior to the cure of an Event,
except in the case of the first Event Date.

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    (c)       Each Holder (and any assignee of Holder) agrees to furnish to the
Company a completed Questionnaire in the form attached to this Agreement as
Annex B (a “Selling Holder Questionnaire”). The Company shall not be required to
include the Registrable Securities of a Holder in the Registration Statement who
fails to furnish to the Company a fully completed Selling Holder Questionnaire
at least two Trading Days prior to the Filing Date (subject to the requirements
set forth in Section 3(a)).

    (d)       In the event of a public sale of the Company’s equity securities
by the Company in an underwritten offering, the Holders agree, if requested by
the managing underwriter or underwriters in such underwritten offering, not to
effect any public sale or distribution of any securities (except, in each case,
as part of the applicable registration, if permitted) that are the same as or
similar to those being registered in connection with such public sale by the
Company, or any securities convertible into or exchangeable or exercisable for
such securities, during the period beginning 7 days before, and ending 120 days
(or such lesser period as may be permitted by the Company or such managing
underwriter or underwriters) after, the effective date of the registration
statement, filed in connection with such registration, to the extent timely
notified in writing by the Company or the managing underwriter or underwriters.

    (e)       Notwithstanding anything in this Agreement to the contrary, if the
Company shall furnish to the selling Holders a certificate signed by the Chief
Executive Officer of the Company stating that the Board of Directors has made
the good faith determination (i) that continued use by the selling Holders of
the Registration Statement for purposes of effecting offers or sales of
Registrable Securities pursuant thereto would require, under the Securities Act,
disclosure in the Registration Statement (or the prospectus relating thereto) of
material, nonpublic information concerning the Company, its business or
prospects or any proposed transaction involving the Company, and (ii) that such
disclosure would be premature and would be adverse to the Company, its business
or prospects or any such proposed transaction or would make the successful
consummation by the Company of any such transaction significantly less likely,
then the right of the selling Holders to use the Registration Statement (and the
prospectus relating thereto) for purposes of effecting offers or sales of
Registrable Securities pursuant thereto shall be suspended for a period (the
“Suspension Period”) of not more than 60 days after delivery by the Company of
the certificate referred to above in this Section 2(e). During the Suspension
Period, none of the Holders shall offer or sell any Registrable Securities
pursuant to or in reliance upon the Registration Statement (or the prospectus
relating thereto). The Company may not exercise this right more than two times
in each year after the Closing.

    (f)       Holders shall not, during the period starting with the Company’s
date of filing of, and ending ninety calendar days immediately following the
effective date of any registration statement pertaining to securities of the
Company, if so requested by an underwriter in an underwritten offering for the
Company, effect any public sale or distribution of any of the Company’s equity
securities including a sale pursuant to Rule 144. In addition, if requested by
the Company, the Stockholders shall not effect any public sale or distribution
of any of the Registrable Securities pursuant to the Registration Statement,
during the ten-day period prior to any period during which an exchange ratio or
similar valuation formula based upon the trading prices of the Company’s common
stock is being calculated.

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    3.       Registration Procedures.

        In connection with the Company’s registration obligations hereunder, the
Company shall:

    (a)       Not less than ten Trading Days prior to the filing of the
Registration Statement or any related Prospectus or any amendment or supplement
thereto, the Company shall furnish to each Holder copies of the “Selling
Stockholders” section of such document, the “Plan of Distribution” and any risk
factor contained in such document that addresses specifically this transaction
or the Selling Stockholders, as proposed to be filed which documents will be
subject to the review of such Holder. The Company shall not file the
Registration Statement, any Prospectus or any amendments or supplements thereto
in which the “Selling Stockholder” section thereof differs from the disclosure
received from a Holder in its Selling Holder Questionnaire (as amended or
supplemented).

    (b)       (i) Prepare and file with the Commission such amendments,
including post-effective amendments, to the Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep such
Registration Statement continuously effective as to the applicable Registrable
Securities for its Effectiveness Period and prepare and file with the Commission
such additional Registration Statements in order to register for resale under
the Securities Act all of the Registrable Securities; (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus supplement,
and as so supplemented or amended to be filed pursuant to Rule 424; (iii)
respond as promptly as reasonably possible to any comments received from the
Commission with respect to the Registration Statement or any amendment thereto
and, as promptly as reasonably possible provide the Holders true and complete
copies of all correspondence from and to the Commission relating to such
Registration Statement that would not result in the disclosure to the Holders of
material and non-public information concerning the Company; and (iv) comply in
all material respects with the provisions of the Securities Act and the Exchange
Act with respect to the Registration Statement and the disposition of all
Registrable Securities covered by such Registration Statement.

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    (c)       Notify the Holders as promptly as reasonably possible (and, in the
case of (i)(A) below, not less than three Trading Days prior to such filing and,
in the case of (v) below, not less than three Trading Days prior to the
financial statements in the Registration Statement becoming ineligible for
inclusion therein) and (if requested by any such Person) confirm such notice in
writing no later than one Trading Day following the day (i)(A) when a Prospectus
or any Prospectus supplement or post-effective amendment to the Registration
Statement is proposed to be filed; (B) when the Commission notifies the Company
whether there will be a “review” of such Registration Statement and whenever the
Commission comments in writing on such Registration Statement (the Company shall
provide true and complete copies thereof and all written responses thereto to
each of the Holders that pertain to the Holders as a Selling Stockholder or to
the Plan of Distribution, but not information which the Company believes would
constitute material and non-public information); and (C) with respect to the
Registration Statement or any post-effective amendment, when the same has become
effective; (ii) of any request by the Commission or any other Federal, state or
Israeli governmental authority for amendments or supplements to the Registration
Statement or Prospectus or for additional information; (iii) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement covering any or all of the Registrable Securities or the
initiation of any Proceedings for that purpose; (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (v) of the occurrence of any event or passage of time that makes
the financial statements included in the Registration Statement ineligible for
inclusion therein or any statement made in such Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to such
Registration Statement, Prospectus or other documents so that, in the case of
such Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.

    (d)       Use its reasonable efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of (i) any order suspending the effectiveness of
the Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.

    (e)       Furnish to each Holder, at the Company’s expense, at least one
conformed copy of the Registration Statement and each amendment thereto and all
exhibits to the extent requested by such Person (including those previously
furnished) promptly after the filing of such documents with the Commission.

    (f)       Promptly deliver to each Holder, without charge, a reasonable
number of copies of each Prospectus or Prospectuses (including each form of
prospectus) and each amendment or supplement thereto as such Persons may
reasonably request. The Company hereby consents to the use of such Prospectus
and each amendment or supplement thereto by each of the selling Holders in
connection with the offering and sale of the Registrable Securities covered by
such Prospectus and any amendment or supplement thereto.

    (g)       Prior to any public offering of Registrable Securities, register
or qualify such Registrable Securities for offer and sale under the securities
or Blue Sky laws of all jurisdictions within the United States and Israel, to
keep each such registration or qualification (or exemption therefrom) effective
during the Effectiveness Period and to do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of the
Registrable Securities covered by the Registration Statement; provided, that the
Company shall not be required to qualify generally to conduct business in any
jurisdiction where it is not so qualified, or subject the Company to any tax in
any such jurisdiction where it is not so subject, or file a general consent to
service of process in any such jurisdiction.

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    (h)       Cooperate with the Holders, at the Holders’ request and expense,
to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be delivered to a transferee pursuant to the
Registration Statement, which certificates shall be free, to the extent
permitted by the Purchase Agreement, of all restrictive legends, and to enable
such Registrable Securities to be in such denominations and registered in such
names as any such Holders may request.

    (i)       Upon the occurrence of any event contemplated by Section 3(c)(v),
as promptly as reasonably possible, prepare a supplement or amendment, including
a post-effective amendment, to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor the Prospectus will
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.

    4.       Registration Expenses. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to
the Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with any Trading Market on which the Common Stock is then
listed for trading, and (B) in compliance with applicable state securities or
Blue Sky laws or Israeli securities laws), (ii) printing expenses (including,
without limitation, expenses of printing certificates for Registrable Securities
and of printing prospectuses if the printing of prospectuses is reasonably
requested by the holders of a majority of the Registrable Securities included in
the Registration Statement), (iii) messenger, telephone and delivery expenses,
(iv) fees and disbursements of counsel for the Company, (v) Securities Act
liability insurance, if the Company so desires such insurance, and (vi) fees and
expenses of all other Persons retained by the Company in connection with the
consummation of the transactions contemplated by this Agreement. In addition,
the Company shall be responsible for all of its internal expenses incurred in
connection with the consummation of the transactions contemplated by this
Agreement (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit and the fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange as required
hereunder. the company is not responsible for any counsel or any internal
expenses the Holders.

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    5.       Indemnification.

    (a)       Indemnification by the Company. The Company shall, notwithstanding
any termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, agents, investment advisors, partners, members and
employees of each of them, each Person who controls any such Holder (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, agents and employees of each such controlling
Person, to the fullest extent permitted by applicable law, from and against any
and all losses, claims, damages, liabilities, costs (including, without
limitation, reasonable costs of preparation and reasonable attorneys’ fees) and
expenses (collectively, “Losses”), as incurred, arising out of or relating to
any untrue or alleged untrue statement of a material fact contained in the
Registration Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein (in the case of
any Prospectus or form of prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading, except to the extent,
but only to the extent, that (1) such untrue statements or omissions are based
solely upon information regarding such Holder furnished in writing to the
Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement, such
Prospectus or such form of Prospectus or in any amendment or supplement thereto
(it being understood that the Holder has approved Annex A hereto for this
purpose) or (2) in the case of an occurrence of an event of the type specified
in Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective
Prospectus after the Company has notified such Holder in writing that the
Prospectus is outdated or defective and prior to the receipt by such Holder of
an Advice or an amended or supplemented Prospectus, but only if and to the
extent that following the receipt of the Advice or the amended or supplemented
Prospectus the misstatement or omission giving rise to such Loss would have been
corrected. The Company shall notify the Holders promptly of the institution,
threat or assertion of any Proceeding of which the Company is aware in
connection with the transactions contemplated by this Agreement.

    (b)       Indemnification by Holders. Each Holder shall, severally and not
jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses, as
incurred, arising solely out of or based solely upon: (x) such Holder’s failure
to comply with the prospectus delivery requirements of the Securities Act or (y)
any untrue statement of a material fact contained in the Registration Statement,
any Prospectus, or any form of prospectus, or in any amendment or supplement
thereto, or arising solely out of or based solely upon any omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading to the extent, but only to the extent that, (1) such
untrue statements or omissions are based solely upon information regarding such
Holder furnished in writing to the Company by such Holder expressly for use
therein, or to the extent that such information relates to such Holder or such
Holder’s proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for use in
the Registration Statement (it being understood that the Holder has approved
Annex A hereto for this purpose), such Prospectus or such form of Prospectus or
in any amendment or supplement thereto or (2) in the case of an occurrence of an
event of the type specified in Section 3(c)(ii)-(v), the use by such Holder of
an outdated or defective Prospectus after the Company has notified such Holder
in writing that the Prospectus is outdated or defective and prior to the receipt
by such Holder of an Advice or an amended or supplemented Prospectus, but only
if and to the extent that following the receipt of the Advice or the amended or
supplemented Prospectus the misstatement or omission giving rise to such Loss
would have been corrected. In no event shall the liability of any selling Holder
hereunder be greater in amount than the dollar amount of the net proceeds
received by such Holder upon the sale of the Registrable Securities giving rise
to such indemnification obligation.

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    (c)       Conduct of Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity hereunder (an
“Indemnified Party”), such Indemnified Party shall promptly notify the Person
from whom indemnity is sought (the “Indemnifying Party”) in writing, and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Indemnified Party and the payment of all
fees and expenses incurred in connection with defense thereof; provided, that
the failure of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this Agreement,
except (and only) to the extent that it shall be finally determined by a court
of competent jurisdiction (which determination is not subject to appeal or
further review) that such failure shall have proximately and materially
adversely prejudiced the Indemnifying Party.

        An Indemnified Party shall have the right to employ separate counsel in
any such Proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party or
Parties unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such Indemnified Party
shall have been advised by counsel that a conflict of interest is likely to
exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.

        All fees and expenses of the Indemnified Party (including reasonable
fees and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within ten Trading
Days of written notice thereof to the Indemnifying Party (regardless of whether
it is ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying Party may require
such Indemnified Party to undertake to reimburse all such fees and expenses to
the extent it is finally judicially determined that such Indemnified Party is
not entitled to indemnification hereunder).

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    (d)       Contribution. If a claim for indemnification under Section 5(a) or
5(b) is unavailable to an Indemnified Party (by reason of public policy or
otherwise), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 5(c), any reasonable attorneys’ or other
reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to
such party in accordance with its terms.

        The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.

        The indemnity and contribution agreements contained in this Section are
in addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.

    6.       Miscellaneous.

    (a)       Remedies. In the event of a breach by the Company or by a Holder,
of any of their obligations under this Agreement, each Holder or the Company, as
the case may be, in addition to being entitled to exercise all rights granted by
law and under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.

    (b)       No Piggyback on Registrations. Neither the Company nor any of its
security holders (other than the Holders in such capacity pursuant hereto) may
include securities of the Company in the Registration Statement other than the
Registrable Securities.

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    (c)        Compliance. Each Holder covenants and agrees that it will comply
with the prospectus delivery requirements of the Securities Act as applicable to
it in connection with sales of Registrable Securities pursuant to the
Registration Statement.

    (d)        Discontinued Disposition. Each Holder agrees by its acquisition
of such Registrable Securities that, upon receipt of a notice from the Company
of the occurrence of any event of the kind described in Section 3(c), such
Holder will forthwith discontinue disposition of such Registrable Securities
under the Registration Statement until such Holder’s receipt of the copies of
the supplemented Prospectus and/or amended Registration Statement or until it is
advised in writing (the “Advice”) by the Company that the use of the applicable
Prospectus may be resumed, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement. The
Company may provide appropriate stop orders to enforce the provisions of this
paragraph.

    (e)        Amendments and Waivers. The provisions of this Agreement,
including the provisions of this Section 6(e), may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and the Holders of no less than a majority in interest of the then outstanding
Registrable Securities. Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of certain Holders and that does not directly or
indirectly affect the rights of other Holders may be given by Holders of at
least a majority of the Registrable Securities to which such waiver or consent
relates.

    (f)        Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (a) the date of
transmission, if such notice or communication is delivered via facsimile
(provided the sender receives a machine-generated confirmation of successful
transmission) at the facsimile number specified in this Section prior to 6:30
p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the
date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number specified in this Section on a day that is not a Trading
Day or later than 6:30 p.m. (New York City time) on any Trading Day, (c) the
Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service, or (d) upon actual receipt by the party to whom such
notice is required to be given. The address for such notices and communications
shall be as follows:

  If to the Company: Ampal-American Israel Corporation
111 Arlozorov Street
Tel Aviv, Israel 62098
Attention: Yoram Firon
Facsimile: 972-3-608-0101

  With a copy to: Bryan Cave LLP
1290 Avenue of the Americas
New York, New York 10104
Attention: Kenneth L. Henderson, Esq.;
Facsimile: (212) 541-1357

  If to an Investor: To the address set forth under such Investor's name on the
signature pages hereto.

  If to any other Person who is then the registered Holder:

  To the address of such Holder as it appears in the stock transfer books of the
Company

or such other address as may be designated in writing hereafter, in the same
manner, by such Person.

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    (g)       Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties and shall inure to the benefit of each Holder provided that the
requirements of this Section 6(g) fulfilled. The Company may not assign its
rights or obligations hereunder without the prior written consent of each
Holder. None of the rights of any Holder under this Agreement shall be
transferred or assigned to any person. Notwithstanding the foregoing, a Holder’s
right under this Agreement may be assigned, in whole or in part, to any
permitted transferee, and any permitted transferee shall be deemed to be a
Holder (and, to the extent required by law, amend the Registration Statement in
connection with such assignment); provided that no such assignment shall be
effective or confer any right on any such assignee unless, prior to such
assignment, the assignee agrees in writing, by executing and delivering to the
Company a counterpart signature page to this Agreement and such assignee will be
bound by all provisions binding on a Holder hereunder.

    (h)       Execution and Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and, all of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.

    (i)       Governing Law. This Agreement shall be governed and interpreted in
accordance with the internal laws of the State of New York, without regard to
the principles of conflicts of law thereof. Each party hereby irrevocably
submits to the jurisdiction of the New York Courts for the adjudication of all
Proceedings, and hereby irrevocably waives, and agrees not to assert in any
Proceeding, any claim that it is not personally subject to the jurisdiction of
any New York Court, or that any such New York Court is an inconvenient or
improper forum for such Proceeding. Each party hereby irrevocably waives
personal service of process and consents to process being served in any
Proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address set
forth on the signature page hereto and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. Each party hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any
Proceeding. If there shall be commenced a Proceeding, then the prevailing party
in such Proceeding shall be reimbursed by the adverse party or parties for its
reasonable attorneys fees and other expenses incurred in connection therewith.

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    (j)       Cumulative Remedies. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.

    (k)       Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.

    (l)       Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

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        IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.

  AMPAL-AMERICAN ISRAEL CORPORATION

By:_________________________________
     Name:
     Title:

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES OF INVESTOR TO FOLLOW]

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        IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.

  INVESTOR

 _______________________________________________

By: ____________________________________________
         Name:
         Title:

ADDRESS FOR NOTICE

c/o: ___________________________________________

Street: _________________________________________

City/State/Zip: ___________________________________

Attention: ______________________________________

Tel: ___________________________________________

Fax: ___________________________________________

Email: _________________________________________

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Annex A

Plan of Distribution

        The Selling Stockholders and any of their pledgees, donees, transferees,
assignees and successors-in-interest may, from time to time, sell any or all of
their shares of Common Stock on any stock exchange, market or trading facility
on which the shares are traded or in private transactions. These sales may be at
fixed or negotiated prices. The Selling Stockholders may use any one or more of
the following methods when selling shares:

— ordinary brokerage transactions and transactions in which the broker-dealer
solicits Investors;

— block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;

— purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;

— an exchange distribution in accordance with the rules of the applicable
exchange;

— privately negotiated transactions;

— to cover short sales made after the date that this Registration Statement is
declared effective by the Commission;

— broker-dealers may agree with the Selling Stockholders to sell a specified
number of such shares at a stipulated price per share;

— a combination of any such methods of sale; and

— any other method permitted pursuant to applicable law.

        The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.

        Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The Selling Stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.

        The Selling Stockholders may from time to time pledge or grant a
security interest in some or all of the Shares owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell shares of Common Stock from time to time under this
prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act of 1933 amending the list of
selling stockholders to include the pledgee, transferee or other successors in
interest as selling stockholders under this prospectus.

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        Upon the Company being notified in writing by a Selling Stockholder that
any material arrangement has been entered into with a broker-dealer for the sale
of Common Stock through a block trade, special offering, exchange distribution
or secondary distribution or a purchase by a broker or dealer, a supplement to
this prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing (i) the name of each such Selling Stockholder and of
the participating broker-dealer(s), (ii) the number of shares involved, (iii)
the price at which such the shares of Common Stock were sold, (iv)the
commissions paid or discounts or concessions allowed to such broker-dealer(s),
where applicable, (v) that such broker-dealer(s) did not conduct any
investigation to verify the information set out or incorporated by reference in
this prospectus, and (vi) other facts material to the transaction. In addition,
upon the Company being notified in writing by a Selling Stockholder that a donee
or pledgee intends to sell more than 500 shares of Common Stock, a supplement to
this prospectus will be filed if then required in accordance with applicable
securities law.

        The Selling Stockholders also may transfer the shares of Common Stock in
other circumstances, in which case the transferees, pledgees or other successors
in interest will be the selling beneficial owners for purposes of this
prospectus.

        The Selling Stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be “underwriters” within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. Discounts, concessions,
commissions and similar selling expenses, if any, that can be attributed to the
sale of Securities will be paid by the Selling Stockholder and/or the
purchasers. Each Selling Stockholder has represented and warranted to the
Company that it acquired the securities subject to this Registration Statement
in the ordinary course of such Selling Stockholder’s business and, at the time
of its purchase of such securities such Selling Stockholder had no agreements or
understandings, directly or indirectly, with any person to distribute any such
securities.

        The Company has advised each Selling Stockholder that it may not use
shares registered on this Registration Statement to cover short sales of Common
Stock made prior to the date on which this Registration Statement shall have
been declared effective by the Commission. If a Selling Stockholder uses this
prospectus for any sale of the Common Stock, it will be subject to the
prospectus delivery requirements of the Securities Act. The Selling Stockholders
will be responsible to comply with the applicable provisions of the Securities
Act and Exchange Act, and the rules and regulations thereunder promulgated,
including, without limitation, Regulation M, as applicable to such Selling
Stockholders in connection with resales of their respective shares under this
Registration Statement.

        The Company is required to pay all fees and expenses incident to the
registration of the shares, but the Company will not receive any proceeds from
the sale of the Common Stock. The Company has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.

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Annex B

AMPAL-AMERICAN ISRAEL CORPORATION

SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE

The undersigned beneficial owner of common stock (the “Common Stock”), of
Ampal-American Israel Corporation (the “Company”) understands that the Company
has filed or intends to file with the Securities and Exchange Commission (the
“Commission”) a Registration Statement for the registration and resale of the
Registrable Securities, in accordance with the terms of the Registration Rights
Agreement, dated as of November __, 2006 (the “Registration Rights Agreement”),
among the Company and the Investors named therein. A copy of the Registration
Rights Agreement is available from the Company upon request at the address set
forth below. All capitalized terms used and not otherwise defined herein shall
have the meanings ascribed thereto in the Registration Rights Agreement.

The undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:

QUESTIONNAIRE

1. Name.

  (a) Full Legal Name of Selling Securityholder

 

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  (b) Full Legal Name of Registered Holder (if not the same as (a) above)
through which Registrable Securities Listed in Item 3 below are held:

 

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  (c) Full Legal Name of Natural Control Person (which means a natural person
who directly or indirectly alone or with others has power to vote or dispose of
the securities covered by the questionnaire):

 

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2. Address for Notices to Selling Securityholder:

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Telephone: ______________________________________________________
Fax: ____________________________________________________________
Contact Person: ___________________________________________________

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3. Beneficial Ownership of Registrable Securities:

  Type and Principal Amount of Registrable Securities beneficially owned:

 

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4. Broker-Dealer Status:

  (a) Are you a broker-dealer?

Yes o No o

  Note: If yes, the Commission's staff has indicated that you should be
identified as an underwriter in the Registration Statement.

  (b) Are you an affiliate of a broker-dealer?

Yes o No o

  (c) If you are an affiliate of a broker-dealer, do you certify that you bought
the Registrable Securities in the ordinary course of business, and at the time
of the purchase of the Registrable Securities to be resold, you had no
agreements or understandings, directly or indirectly, with any person to
distribute the Registrable Securities?

Yes o No o

  Note: If no, the Commission's staff has indicated that you should be
identified as an underwriter in the Registration Statement.

5. Beneficial Ownership of Other Securities of the Company Owned by the Selling
Securityholder.

  Except as set forth below in this Item 5, the undersigned is not the
beneficial or registered owner of any securities of the Company other than the
Registrable Securities listed above in Item 3.

  Type and Amount of Other Securities beneficially owned by the Selling
Securityholder:

 

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6. Relationships with the Company:

  Except as set forth below, neither the undersigned nor any of its affiliates,
officers, directors or principal equity holders (owners of 5% of more of the
equity securities of the undersigned) has held any position or office or has had
any other material relationship with the Company (or its predecessors or
affiliates) during the past three years.

  State any exceptions here:

 

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The undersigned agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein that may occur subsequent to the date
hereof and prior to the Effective Date for the Registration Statement.

By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 and the inclusion of such
information in the Registration Statement and the related prospectus. The
undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of the Registration Statement
and the related prospectus.

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.

Dated: ___________________________________ Beneficial
Owner:_______________________

By: ____________________________________
     Name:
     Title:

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND
RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

  Ampal-American Israel Corporation
111 Arlozorov Street
Tel Aviv, Israel 62098
Attention: Yoram Firon
Facsimile: 972-3-608-0101

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