AGREEMENT

              Made and signed on the 5th day of December, 1999

                                  Between:

                            Koor Industries Ltd.
                      of 21 Ha'arbaaa Street, Tel Aviv
                        (hereinafter: the "Seller")

of the first part

                                    And:

                     Clal Industries & Investments Ltd.
         of Migdal Clal Atidim, 4 Devorah Haneviah Street, Tel Aviv
                         (hereinafter: the "Buyer")

of the other part


                       It is agreed and declared by the parties as follows:

1.       The Seller declares that as at the date of signing this Agreement
         it is, and as at the Performance Date as defined below it will be,
         the owner and holder, directly and indirectly, of: (a) 5,000,000
         ordinary "A" shares of a par value of NIS 0.01 each, 29,885,877
         Ordinary "B" shares of a par value of NIS 0.01 each, 4,827,321,642
         Ordinary "D" shares of a par value of NIS 0.01 each, in Mashav
         Initiating and Development Ltd. ("Mashav"), which constitute all
         the holdings of the Seller, directly and indirectly, in Mashav
         ("Mashav Shares"); and (b) 50% of all the issued and paid up share
         capital in Tuval - General Transport Company Ltd. ("Tuval"), which
         constitutes all the holdings of the Seller, directly and
         indirectly, in Tuval ("Tuval Shares"); and also (c) 50% of all
         parts of the partnership in Tuval Transportation M.C. 1974 -
         Partnership ("Tuval Partnership"), which constitutes all the
         holdings of the Seller, directly and indirectly, in Tuval
         Partnership ("Tuval Rights") (Mashav Shares, Tuval Shares and
         Tuval Rights are hereinafter referred to together as the "Object
         of Sale"). The Seller further declares that in the two years
         preceding the signing of this Agreement, it has not transferred
         shares in Mashav.

2.       The Seller declares that on the Performance Date, the Object of
         Sale will be free of any third party rights whatsoever, and that
         on the Performance Date no impediment will exist, whether under
         the law or by agreement applicable to the Seller, to transfer the
         Object of Sale by the Seller to the Buyer under this Agreement,
         and all subject to receipt of the approvals noted in Clause 9
         below. The Seller further declares that subject to the correctness
         of the representations of the Buyer in this Agreement on the date
         of signing this Agreement and on the date of transfer of the
         Object of Sale, the Seller will sell the Object of Sale to the
         Buyer in full cognizance of the condition, assets, liabilities,
         plans and development possibilities of Mashav, Tuval, Tuval
         Partnership and their affiliated companies.

3.       The Buyer declares that on the Performance Date, no impediment
         will exist, whether under the law or by agreement applicable to
         the Buyer, to purchase of the Object of Sale by the Buyer from the
         Seller under this Agreement, and all subject to receipt of the
         approvals noted in Clause 9 below. The Buyer further declares that
         subject to correctness of the representations of the Seller in
         this Agreement on the date of signing this Agreement and on the
         date of transfer of the Object of Sale, the Buyer will purchase
         the Object of Sale in the condition of Mashav, Tuval and Tuval
         Partnership "As Is", without any representations on the part of
         the Seller and/or anyone on its behalf except as set forth in this
         Agreement, and in full cognizance of the condition, assets,
         liabilities, plans and development possibilities of Mashav, Tuval,
         Tuval Partnership and their affiliated companies.

4.       Upon completion of the transaction in accordance with the details
         in this Agreement, on the Performance Date, all the agreements
         between the Seller and the Buyer and its wholly-owned companies in
         connection with the Object of Sale shall be canceled, including
         the agreement between the Seller and the Buyer dated 8.4.98
         concerning Mashav, its amendment dated 19.11.98 (the "Option
         Agreement") and all the undertakings contained therein, except for
         Clauses 22.2 and 22.3 to the Option Agreement, which shall remain
         in effect and shall be binding upon the parties as if they were an
         integral part of this Agreement. Furthermore, on the Performance
         Date, Clause 22.2 of the Option Agreement shall be amended so that
         the words "from the date of expiry of the Option as defined in
         Clause 2.3 above" are replaced by the Performance Date of this
         Agreement.

5.       Upon completion of the transaction in accordance with the details
         in this Agreement, on the Performance Date, all the rights of the
         Seller, directly and indirectly, towards any of Mashav, Tuval,
         Tuval Partnership, Nesher Israeli Cement Works Ltd. ("Nesher") and
         Ofek Projects & Investments Ltd. ("Ofek"), shall be assigned in
         full and absolutely to the Buyer, effective from the date of
         signing this Agreement, including the rights to receive any
         management fees, except for (1) the Seller's right to receive
         management fees from Nesher for the period up to 31.12.99, (2) the
         Seller's rights pursuant to the agreement Annex A to this
         Agreement, and (3) undertakings made in the normal course of
         business, and all at no additional consideration.

6.       Upon completion of the transaction in accordance with the details
         in this Agreement, on the Performance Date, the Seller shall sign
         a full and absolute waiver in which it waives any allegation or
         claim against the Buyer, Mashav, Ofek, Tuval, Tuval Partnership
         and their subsidiary and affiliated companies, their managers and
         employees and/or anyone on their behalf who is connected with
         Mashav, Ofek, Tuval, Tuval Partnership and any of their subsidiary
         and affiliated companies, whether as plaintiff or as defendant,
         whether as third party or otherwise, but excepting a waiver as
         aforesaid in relation to the performance stated in this Agreement
         and except for a waiver as aforesaid in relation to undertakings
         in the normal course of business (which have no bearing on the
         relations between the Seller and any of the above companies by
         virtue of the fact that the Seller holds shares or rights therein,
         or relations between the Seller and the Buyer as shareholder in
         the above companies, except in connection with management fees as
         set forth in Clause 11 below).

7.       Upon completion of the transaction in accordance with the details
         in this Agreement, on the Performance Date, the Buyer, Mashav,
         Ofek, Tuval, Tuval Partnership and Nesher shall sign a full and
         absolute waiver in which they waive any allegation or claim
         connected with any of Mashav, Ofek, Tuval, Tuval Partnership and
         any of their subsidiary and affiliated companies, against the
         Seller and/or anyone on its behalf and/or its employees and/or its
         managers and the Buyer shall undertake not to bring allegations as
         aforesaid in the name of Mashav, Ofek, Tuval, Tuval Partnership
         and any of their subsidiary and affiliated companies against the
         Seller and/or anyone on its behalf, whether as plaintiff or as
         defendant, whether as third party or otherwise, but excepting a
         waiver as aforesaid in relation to the performance stated in this
         Agreement and except for a waiver as aforesaid in relation to
         undertakings in the normal course of business (which have no
         bearing on the relations between the Seller and any of the above
         companies by virtue of the fact that the Seller holds shares or
         rights therein, or relations between the Seller and the Buyer as
         shareholders in the above companies).

8.       8.1 On the Performance Date, the Seller shall sell and transfer to
         the Buyer the Object of Sale in the consideration as defined
         below, and the Buyer shall purchase and receive in transfer from
         the Seller the Object of Sale in the consideration as defined
         below and in accordance with that set forth in this Agreement.

         8.2 The parties agree that in final and absolute consideration of
         purchase of the Object of Sale, the Buyer shall pay the Seller, on
         the Performance Date, against sale and transfer of the Object of
         Sale and in accordance with that set forth in this Agreement, a
         sum in New Israel Shekels (NIS) equal to US $215,976,335 (the
         "Consideration").

         8.3 The value in NIS of the Consideration will be calculated at
         the representative exchange rate of the U.S. dollar against the
         shekel most recently published by the Bank of Israel on 5.1.2000
         (the "Representative Exchange Rate"). If publication of the
         Representative Exchange Rate by the Bank of Israel is ceased, the
         Representative Exchange Rate for the purpose of calculating the
         Consideration shall be the average of the buy and sell rates of
         the U.S. dollar (checks and transfers) which was published at
         10:00 on the morning of 6.1.2000 by Bank Hapoalim B.M., Bank Leumi
         Le'Israel B.M. and Israel Discount Bank Ltd., at the average of
         these three banks.

         8.4 It is agreed between the parties that if by 6.1.2000, all the
         conditions precedent as set forth in Clause 9 below have not been
         met, then on 6.1.2000 by 11:00 in the morning, the Buyer shall
         deposit the Consideration in a trust account which will be opened
         by Adv. Kenny Lalo and by Adv. Shlomo Heller (the "Trustees") in
         Bank _____________, __________ branch. The Consideration shall be
         deposited in shekel or dollar deposits, as the Seller shall
         instruct. On the Performance Date, all the moneys accrued in the
         above account shall be transferred to the Seller by the Trustees,
         net of expenses and bank charges, or the above account shall be
         transferred to the name of the Seller, all as the Seller may
         choose, together with full and absolute release of any liability
         of the Trustees, and the aforesaid transfer of the moneys or
         transfer of the account shall be deemed to be payment of the
         Consideration as set forth in Clause 10.2.4 below. If the
         Performance Date was not met by the Final Date as defined below in
         Clause 13.2, the Trustees shall transfer to the Buyer all the
         moneys accrued in the above account, net of expenses and bank
         charges, on the first business day on which the bank is open after
         the Final Date.

9.       Performance of the Agreement is contingent upon receipt of the
         approvals and completion of the following actions:

         9.1 On the Performance Date of this Agreement, the agreement for
         the sale of the holdings of Ofek in Mashal Alumina Industries Ltd.
         ("Alumina") to the Seller and the Buyer shall be effected, in
         equal parts between them, in accordance with the agreement
         attached hereto as Annex A to this Agreement, after receipt of all
         the approvals for this transaction as set forth in Annex A to this
         Agreement.

         9.2 Receipt of the approval of the Restraint of Trade Commissioner
         (the "Commissioner") for the transaction which is the subject of
         this Agreement.

         9.3 Approval of the competent organs of the Buyer for purchase of
         the Object of Sale, and approval of the competent organs of the
         Seller for sale of the Object of Sale.

         9.4 Implementation of the resolution of the Board of Directors of
         Mashav in accordance with the text attached to this Agreement as
         Annex B.

10.      Performance of the Agreement:

         10.1 The date of performance of this Agreement shall be 11:00 on
         the third business day after receipt of the last of the approvals
         listed in Clause 9 above, provided that if such date falls prior
         to 6.1.2000, it shall be postponed until 6.1.2000 (hereinafter and
         above: the "Performance Date").

         10.2 On the Performance Date, the parties shall convene in the
         office of Clal Industries & Investments Ltd. (in Migdal Clal
         Atidim, Building No. 4, Kiryat Atidim, Tel Aviv), and all the
         following actions shall be done simultaneously and shall be
         contingent one upon the other:

              10.2.1 The approval of the Commissioner for performance of
              the transaction shall be presented.

              10.2.2 The resolution of the Board of Directors of Mashav,
              attached to this Agreement as Annex B, shall be implemented,
              or confirmation shall be presented, showing that the
              resolution was implemented prior to the Performance Date.

              10.2.3 The Seller shall convey to the Buyer deeds of transfer
              of Mashav Shares and Tuval Shares, and documents for the
              amendment of the Tuval Partnership agreement, signed to the
              order of the Buyer, and signed share certificates in respect
              of the Object of Sale in the name of the Buyer. If such share
              certificates were not found in the Seller's possession, the
              Seller shall transfer to the Buyer a letter confirming that
              the certificates were not found. If the share certificates
              were found, the Seller shall transfer them to the Buyer
              immediately they are found. If during the period up to the
              Performance Date or thereafter, additional shares in Mashav
              held by the Seller directly or indirectly should come to
              light, which are not included in the definition of the Object
              of Sale in Clause 1 above, they shall be transferred to the
              Buyer free of charge within 7 days of the date on which they
              come to light.

              10.2.4 If the Performance Date is 6.1.2000, the Buyer shall
              pay the Seller the Consideration by way of bank transfer to
              the bank account in the Seller's name. number 664481 at Bank
              Hapoalim, Main Branch (600), Tel Aviv. Consideration which is
              paid by 12:00 midday shall be calculated at the
              Representative Exchange Rate. If the Performance Date is
              after 6.1.2000, the amount of the deposit shall be released
              by the Trustees from the trust account and transferred to the
              Seller's account or transferred the account in the Seller's
              name, all as provided in Clause 8.4 above.

              10.2.5 The Option Agreement shall be cancelled and amended as
              provided in Clause 4 above.

              10.2.6 All the rights of the Seller, direct or indirect,
              towards any of Mashav, Tuval, Tuval Partnership, Nesher and
              Ofek, shall be assigned in full and absolute assignment to
              the Buyer, effective from the date of signing this Agreement,
              including the rights to receive any management fees (except as
              determined in Clause 11 below and except for the rights of
              the Seller pursuant to the agreement Annex A to this
              Agreement)all without additional consideration.

              10.2.7 All the directors and members of the executive
              committee who were appointed by, at the request of or on
              behalf of the Seller, to the Boards of Directors of Mashav,
              Ofek, Tuval and to the executive committee of Tuval
              Partnership and any of their subsidiary and affiliated
              companies (including Nesher), shall resign from all the
              aforesaid Boards of Directors and from the executive
              committee, including from any committees of those bodies,
              except for the Board of Directors of Alumina.

              10.2.8 The agreement for the sale of all of Ofek's holdings
              in Alumina to the Seller and to the Buyer in equal parts,
              shall be implemented, in accordance with the agreement
              attached to this Agreement as Annex A, after receipt of all
              the approvals for this transaction as set forth in Annex A to
              this Agreement.

11.      The Buyer shall ensure that immediately after publication of the
         annual financial statements of Nesher for 1999, the Seller shall
         receive, by bank transfer to the account referred to in Clause
         10.2.4 above, its share of the management fees which are paid by
         Nesher to the Seller for the period up to 31.12.99, plus VAT.

12.      12.1 Capital gains tax or any other tax, if applicable, on the
         transaction which is the subject of this Agreement, shall be paid
         by the party upon which this obligation is imposed by law.

         12.2 Tax shall be withheld at source from the Consideration as
         required by law, unless the Seller submits to the Buyer an
         exemption from such withholding from the tax authorities.

         12.3 The parties shall bear the stamp duty for this Agreement and
         for any other related documents which are issued, if any, in equal
         parts between them.

13.      This Agreement, and all the obligations included therein, shall be
         cancelled outright in any of the following situations:

         13.1 On 6.12.1999 at 9:30 in the morning - if either partyfails to
         transfer to the other (and the other party recievesby that date
         and time, confirmation of the legal counsel or company secretary
         of that party that approval of all the competent organs of that
         party has been received for the commitment in this Agreement and
         for performance of all of its requirements.

         13.2 On 30.3.2000 (the "Final Date") - if approval of the
         Commissioner as set forth in Clause 9 above is not obtained by
         29.3.2000 inclusive, or one of the conditions precedent as set
         forth in Clause 9 above is not met, and neither of the parties to
         this Agreement is at fault.

         If the Agreement is cancelled as aforesaid where neither of the
         parties is at fault, neither party shall have any demand or claim
         against the other.

14.      Each party undertakes towards the other to do any act for which
         its signature or doing is required to validate this Agreement or
         for its performance, and the parties declare that they are aware
         that each of the conditions set forth in Clause 10 to this
         Agreement is material and fundamental to this Agreement.

15.      Purchase of the Object of Sale (including assignment of the rights
         as set forth in Clause 10.2.6 above) or any of its parts, shall be
         effected by the Buyer and/or by a wholly-owned subsidiary company
         or companies of the Buyer, directly or indirectly, as the Buyer
         chooses, provided that the Buyer or whoever it may choose as
         aforesaid, shall mutually guarantee and undertake, jointly and
         severally, to fulfill all of the undertakings of the Buyer as
         defined in this Agreement.

16.      This Agreement puts in writing all of the agreements between the
         parties in the maters, which are the subject of this Agreement,
         including sale of the Object of Sale by the Seller and purchase of
         the Object of Sale by the Buyer.

               In witness whereof, the parties have affixed their
signatures:



        Signed: ( - )                              Signed: ( - )
------------------------------------      -----------------------------------
 Clal Industries & Investments Ltd.             Koor Industries Ltd.



Affirmation:
-----------

    We affirm and take upon ourselves everything stated in this Agreement
    relating to us, including the provisions of Clauses 7 - 14.


                                         Signed:       ( - )
                                                ---------------------------
                                         The Central Israeli Company for Trade
                                              and Investments Ltd.