EXHIBIT 10.17

                              EMPLOYMENT AGREEMENT


                   THIS EMPLOYMENT AGREEMENT  ("Agreement"),  effective this 5th
day of March,  1998 (the "Effective  Date"),is entered into by and between Harry
Kurtzman  ("Executive")  and Aura  Systems,  Inc., a Delaware  corporation  (the
"Company").

                   WHEREAS,  Executive  is a founder of the Company and has been
employed by the Company for  several  years in the  capacity of Chief  Executive
Officer; and

                   WHEREAS,  the Company  desires to establish  its right to the
continued  services of Executive,  in the capacity described below, on the terms
and conditions  hereinafter set forth, and Executive is willing to continue such
employment on such terms and conditions.

                   NOW,  THEREFORE,  in consideration  of the mutual  agreements
hereinafter set forth, Executive and the Company have agreed and do hereby agree
as follows:

     1. EMPLOYMENT.  The Company does hereby employ Executive and Executive does
hereby accept  employment as Chief Executive  Officer of the Company.  Executive
shall do and perform all services and acts necessary or advisable to fulfill the
duties and  responsibilities  of his position and shall render such  services on
the terms set forth herein and shall report to the Company's Board of Directors.
In addition, Executive shall have such other executive and managerial powers and
duties with respect to the Company and its  subsidiaries  as may  reasonably  be
assigned to him by the Company's  Board of Directors,  to the extent  consistent
with his positions and status as set forth above.  Executive agrees to devote to
the  Company  and its  subsidiaries  such  time as  shall be  necessary  for the
effective conduct of his duties hereunder.

     2. TERM OF AGREEMENT. The term ("Term") of this Agreement shall commence on
the Effective Date and shall continue for a period of three (3) years; provided,
however,  that on the  first  anniversary  of the  Effective  Date  (and on each
succeeding  anniversary of the Effective  Date during the Term),  the Term shall
automatically be extended by an additional year (unless Executive or the Company
shall give the other at least  ninety  (90) days'  prior  written  notice to the
contrary).

     3.  LOCATION.  In connection  with  Executive's  employment by the Company,
Executive  shall be based at the  headquarters  of the  Company  in El  Segundo,
California,  except for required travel on the. Company's. business to an extent
substantially consistent with present business travel obligations.

     4. COMPENSATION.

     (a) BASE SALARY.  The Company  shall pay  Executive an initial  annual base
salary at the rate of $385,000  per year (the "Base  Salary"),  payable in equal
biweekly  installments  or at such  other  time or  times as  Executive  and the
Company shall agree.  The Base Salary shall be effective  December 19, 1997, and
is subject to increase as recommended by the Compensation Committee and approved
by a majority of the disinterested directors of the Board of Directors. The Base
Salary shall be adjusted on or prior to each  anniversary  of the Effective Date
pursuant to the normal historical  business practices of the Company;  provided,
however,  that the Base Salary shall be no less than the average  salary paid to
chief executive officers in comparable companies in the Los Angeles metropolitan
area as determined by the Company's compensation consultants.

     (b) DISCRETIONARY  BONUS. As recommended by the Compensation  Committee and
approved by a majority of the disinterested directors of the Board of Directors,
Executive  shall be  entitled  to  receive  an  annual  performance  bonus  (the
"Discretionary   Bonus")  from  the  Company   based  on  such  factors  as  the
Compensation Committee may recommend to the disinterested directors of the Board
of Directors.

     (c) TARGET BONUS.  Executive  shall have the  opportunity  to earn a target
bonus (the  "Target  Bonus") up to 50% of  Executive's  Base Salary based on the
attainment of certain  criteria  recommended by the  Compensation  Committee and
approved by a majority of  disinterested  directors  of the Board of  directors.
Such criteria may include sales of the Company, earnings per share, stock price,
return on equity, net earnings growth, net earnings, related return ratios, cash
flow, earnings before interest,  taxes,  depreciation and amortization (EBITDA),
return  on assets  or total  stockholder  return,  reductions  in the  company's
overhead ratio,  and expense to sales ratios.  (d) LIFE  INSURANCE.  The Company
shall maintain a life insurance  policy with a face value equal to two times the
Executive's  Base  Salary on  Executive's  life (the "Life  Insurance  Policy"),
provided that the annual premiums for such policy shall not exceed $10,000.  The
beneficiary of such policy shall be designated by Executive.

     (e)  STOCK  OPTIONS.  Subject  to the  recommendation  of the  Compensation
Committee and approval by a majority of the  disinterested  members of the Board
of Directors, effective as of the date of this Agreement, the Company shall make
a one-time  grant (the  "Initial  Grant") of stock  options (the  "Options")  to
Executive to purchase up to 1,000,000  shares of Common Stock, and commencing on
the  anniversary  date of this Agreement and continuing for each year thereafter
during the Term,  Executive shall be eligible to receive a grant of Options (the
"Subsequent  Grant") to  purchase  up to 500,000  shares of Common  Stock.  Such
Subsequent   Grants  shall  be  made  subject  to  the   recommendation  of  the
Compensation Committee and approval by a majority of the disinterested directors
of the Board of Directors.

                   The per share  exercise  price of the Initial  Grant  Options
shall be equal to $3.31, which amount is equal to 5 % over the fair market value
of the  Initial  Grant  Options  on the date such  Initial  Grant  Options  were
granted.  The per share  exercise  price of the  Subsequent  Grant Options shall
equal the fair market  value of the  Subsequent  Grant  Options on the date such
Subsequent  Grant  Options  are  granted.  The  Options  shall  vest and  become
exercisable at the rate of 20% per year on each of the first five  anniversaries
of the date of grant and the  Options  shall  have a term of ten (10) years from
the date of grant.

                   Agreements  evidencing  such options  shall  provide that the
Options may be  exercised  by giving  written  notice of exercise to the Company
specifying the number of shares to be purchased,  accompanied by payment in full
of the aggregate option price by delivery of (i) cash or cash equivalents,  (ii)
an executed  irrevocable  exercise  notice to the  Company to withhold  from the
number of shares to be  purchased  as set forth in the notice of  exercise  that
number of  shares  of  Common  Stock  having a fair  market  value  equal to the
aggregate  option price of the number of shares to be purchased.  The agreements
shall also provide that,  subject to the unanimous approval by the disinterested
directors  of the Board of  Directors,  the Company may make loans  available to
Executive in connection with the exercise of outstanding  Options. The principal
amount of the loan will be due and  payable  (i) in a lump sum at the end of the
2-year  period  following the exercise date or (ii) upon the earlier sale of the
Option stock on a pro-rata basis,  and will be with recourse  against  Executive
with  respect to  principal  and  interest.  The loan will bear  interest at the
applicable federal rate.

     (f) FRINGE  BENEFITS.  Executive  shall be entitled to  participate  in any
fringe,  welfare and pension benefit and incentive programs adopted from time to
time by the Company for the benefit of its  executive  employees,  and Executive
shall continue to be entitled to such other fringe and other  benefits  provided
by the Company to  Executive  as of the  Effective  Date.  Without  limiting the
generality  of the  foregoing,  Executive  shall be  entitled  to the  following
benefits:  (1)  Participation in  Retirement/Welfare  Plans.  Executive shall be
eligible  to  participate  in  all  savings,   retirement,  and  welfare  plans,
practices,  policies  and  programs  applicable  generally  to senior  executive
officers of the Company and its subsidiaries.

     (2)  Reimbursement  for  Business  Expenses.  The Company  shall  reimburse
Executive for all  reasonable  and necessary  expenses  incurred by Executive in
performing his duties for the Company and its subsidiaries.

     (3)  Vacation.  Executive  shall be entitled to the number of paid vacation
days in accordance with the Company's  policy  applicable to executive  officers
generally.  The timing of paid  vacations  shall be  scheduled  in a  reasonable
manner by Executive.

     (4) Automobile.  The Company shall provide  Executive  during the Term with
the use of an  automobile in  accordance  with the Company's  practice as of the
Effective Date of this Agreement.

     5. TERMINATION OF EXECUTIVE'S EMPLOYMENT.

     (a) DEATH. In the event Executive's  employment  hereunder is terminated by
reason of  Executive's  death,  (i) if Executive is survived by his then spouse,
the Company shall within ten (10) days thereof pay to Executive's  estate a lump
sum in an amount equal to Executive's  then Base Salary,  (ii) the Company shall
pay  all  benefits  payable  to  Executive  under  the  terms  of the  Company's
compensation  and  benefit  plans,  programs  or  arrangements,  and  (iii)  all
outstanding  equity incentive awards (including without limitation stock options
granted under the Stock Plan) shall  immediately  vest and any then  outstanding
stock  options or similar  awards held by  Executive  to the extent  exercisable
shall remain exercisable through the end of the stated term thereof.

     (b) DISABILITY.  If, as a result of Executive's  incapacity due to physical
or mental illness ("Disability"), Executive shall have been absent from the full
time  performance  of his  duties  with  the  Company  for a  period  of six (6)
consecutive months and, within thirty (30) days after written notice is provided
to him by the Company,  he shall not have returned to the full-time  performance
of his duties,  Executive's employment under this Agreement may be terminated by
the  Company or  Executive  for  Disability.  During  any  period  prior to such
termination  during which Executive is absent from the full-time  performance of
his duties with the Company due to Disability, the Company shall continue to pay
Executive  his Base  Salary at the rate in effect  at the  commencement  of such
period of Disability. Upon termination of Executive's employment for Disability,
(i) the Company  shall  within ten (10) days  thereof  pay  Executive a lump sum
equal to his then Base Salary,  the Company  shall pay all  benefits  payable to
Executive  under the terms of the  Company's  compensation  and  benefit  plans,
programs or  arrangements,  and (iii) all outstanding  equity  incentive  awards
(including  without limitation stock options granted under the Stock Plan) shall
immediately vest and any then  outstanding  stock options or similar awards held
by Executive to the extent exercisable shall remain exercisable  through the end
of the stated term thereof.

     (c) TERMINATION FOR CAUSE. The Company may terminate Executive's employment
under this  Agreement  for Cause at any time prior to expiration of the Term. As
used herein, termination for "Cause" shall mean termination upon (1) the willful
failure by  Executive  to  materially  perform his duties with the Company or to
follow the instructions of the Board (other than any such failure resulting from
his incapacity due to physical or mental  illness),  (2) the willful engaging by
Executive in conduct that is materially injurious to the Company,  monetarily or
otherwise,  (3) the  conviction of Executive of (or the pleading by Executive of
nolo contendre to) any felony, fraud or embezzlement or (4) any willful material
breach by  Executive of the terms of this  Agreement,  unless any such breach of
this Agreement by Executive  that is capable of being  corrected is corrected in
all material respects within thirty (30) days following written  notification by
the Company to Executive that the Company intends to terminate the employment of
Executive hereunder by reason of a willful material breach of this Agreement for
Cause as specified in such written notice to Executive.

     Notwithstanding  the foregoing,  Executive shall not be deemed to have been
terminated  for Cause unless and until there shall have been  delivered to him a
copy of a  resolution  duly  adopted  by the  affirmative  vote of not less than
three-fourths of the entire  membership of the Board of Directors of the Company
(the  "Board") at a meeting of the Board (after  reasonable  notice to Executive
and opportunity for Executive, together with his counsel, to be heard before the
Board),  finding  that in the good faith  opinion of the  Board,  Executive  was
guilty of the conduct described herein,  and specifying the particulars  thereof
in full detail.  In the event of termination  for Cause,  this  Agreement  shall
terminate without further  obligation by the Company,  except for (i) payment of
amounts of Base Salary and any fringe benefits  accrued through the date of such
termination,  and (ii) as  otherwise  may be  provided  under  the  terms of any
outstanding equity incentive award.

     (d)  TERMINATION BY THE COMPANY OTHER THAN FOR DEATH.  DISABILITY OR CAUSE.
If Executive's employment is terminated by the Company for any reason other than
Executive's  death  or  Disability  or for  Cause,  (i) the  Company  shall  pay
Executive  as severance  (x) his Base Salary at the rate then in effect  through
the then remaining Term (or for a period of six months, if greater) (either such
period, the "Severance Period") as if Executive had remained employed under this
Agreement during the Severance Period, and (y) an annual  Discretionary Bonus in
an amount equal to Executive's  highest annual  Discretionary Bonus in the three
(3)  year  period  immediately  preceding  such  termination  (including  annual
Discretionary Bonuses received by Executive prior to the Effective Date) payable
at the end of each  remaining  fiscal year ending during the  Severance  Period,
with a pro rata Discretionary  Bonus payment at the end of the Term with respect
to the period, if any, between the end of the last fiscal year ending during the
Severance  Period and the end of the Term,  (ii) the Company  shall  continue to
make payments with respect to premiums on the Life Insurance  Policy through the
end of the Severance Period,  and (iii) all outstanding  equity incentive awards
(including  without limitation stock options granted under the Stock Plan) shall
immediately vest and any then  outstanding  stock options or similar awards held
by Executive to the extent exercisable shall remain exercisable  through the end
of the stated term thereof.

     (e) NO MITIGATION  REQUIRED.  Executive shall not be required in any way to
mitigate the amount of any payment or benefit provided for under this Section 5,
including, but not limited to, by seeking other employment, nor shall the amount
of any payment or benefit  provided  for under this  Section 5 be reduced by any
compensation  earned by Executive as the result of  employment  with or services
provided  to  another  employer  after the date of  Executive's  termination  of
employment  hereunder,  or  otherwise;  provided,  however,  that  in the  event
Executive  shall breach the  provisions  of Section 6 hereof,  the Company shall
have the right,  in addition to any other  remedies it may have with  respect to
such breach,  to offset any amounts  payable  hereunder  or  otherwise  owing to
Executive by the amount of any compensation earned by Executive as the result of
employment with or other services provided to another employer after the date of
Executive's termination of employment, or otherwise.

     6. CONFIDENTIAL INFORMATION AND NON-COMPETITION.

     (a)  CONFIDENTIALITY.   Executive   acknowledges  that  in  his  employment
hereunder,  and during  prior  periods of  employment  with the  Company and its
subsidiaries,  he has occupied  and will  continue to occupy a position of trust
and  confidence.  Executive  shall not, except as may be required to perform his
duties hereunder or as required by applicable law, without limitation in time or
until  such  information  shall have  become  public  other than by  Executive's
unauthorized  disclosure,  disclose  to  others  or  use,  whether  directly  or
indirectly,   any  Confidential   Information  regarding  the  Company  and  its
subsidiaries.  "Confidential  Information"  shall  mean  information  about  the
Company and its subsidiaries, and their respective clients and customers that is
not  disclosed  by the  Company and its  subsidiaries  for  financial  reporting
purposes and that was learned by Executive  in the course of his  employment  by
the Company and its subsidiaries, including (without limitation) any proprietary
knowledge,  trade secrets,  data, formulae,  information and client and customer
lists and all papers,  resumes,  and records (including computer records) of the
documents containing such Confidential Information.  Executive acknowledges that
such  Confidential  Information  is  specialized,  unique in nature and of great
value to the Company and its  subsidiaries,  and that such information gives the
Company  and its  subsidiaries  a  competitive  advantage.  Executive  agrees to
deliver or return to the Company,  at the Company's  request at any time or upon
termination or expiration of his  employment or as soon  thereafter as possible,
all documents, computer tapes and disks, records, lists, data, drawings, prints,
notes and written  information (and all copies thereof) furnished by the Company
and its  subsidiaries or prepared by Executive during the term of his employment
by the Company and its subsidiaries.

     (b) NON-SOLICITATION OF CUSTOMERS AND SUPPLIERS. During the period in which
he is employed by the  Company  (and,  in the event  Executive's  employment  is
terminated  by the  Company  for Cause,  for a period of one (1) year beyond the
expiration of the Term), Executive shall not, directly or indirectly,  influence
or attempt to  influence  customers  or  suppliers  of the Company or any of its
subsidiaries or affiliates to divert their business to any business, individual,
partner, firm,  corporation.,  or other entity that. is then a direct competitor
of  the  Company  or  its  subsidiaries  with  respect  to  electromagnetic  and
electro-optical technology (each such competitor a "Competitor of the Company").

     (c)  NON-SOLICITATION OF EMPLOYEES.  Executive recognizes that he possesses
and will possess  confidential  information about other employees of the Company
and its subsidiaries relating to their education, experience, skills, abilities,
compensation and benefits, and interpersonal relationships with customers of the
Company and its  subsidiaries.  Executive  recognizes  that the  information  he
possesses and will possess about these other  employees is not generally  known,
is of substantial  value to the Company and its  subsidiaries  in developing its
business  and in  securing  and  retaining  customers,  and has been and will be
acquired  by him  because of his  business  position  with the  Company  and its
subsidiaries.  Executive agrees that,  during the period in which he is employed
by the Company  (and, in the event  Executive's  employment is terminated by the
Company  for Cause,  for a period of one (1) year beyond the  expiration  of the
Term), he will not,  directly or indirectly,  solicit or recruit any employee of
the Company or its  subsidiaries  for the purpose of being employed by him or by
any  Competitor  of the  Company  on whose  behalf  he is  acting  as an  agent,
representative  or  employee  and that he will not convey any such  confidential
information  or trade  secrets  about  other  employees  of the  Company and its
subsidiaries to any other person.

     (d) SURVIVAL OF  PROVISIONS.  The  obligations  contained in this Section 6
shall,  to the extent  provided in this  Section 6, survive the  termination  or
expiration of Executive's employment with the Company and, as applicable,  shall
be fully enforceable  thereafter in accordance with the terms of this Agreement.
If it is determined by a court of competent  jurisdiction  in any state that any
restriction  in  this  Section  6 is  excessive  in  duration  or  scope  or  is
unreasonable or unenforceable  under the laws of that state, it is the intention
of the parties that such  restriction may be modified or amended by the court to
render it enforceable to the maximum extent permitted by the law of that state.

     7. NOTICES. All notices and other communications under this Agreement shall
be in  writing  and  shall be given by fax or  first-class  mail,  certified  or
registered with return receipt requested,  and shall be deemed to have been duly
given three (3) days after mailing or twenty-four (24) hours after  transmission
of a fax to the respective persons named below:

If to Company:
Aura Systems
2335 Alaska Avenue
El Segundo, California 90245
Attention: Corporate Secretary
Phone: (310) 643-5300
Fax: (310) 643-8719
If to Executive: Harry Kurtzman
                 Phone:
                 Fax:

Either  party may change such  party's  address for notices by notice duly given
pursuant hereto.

     8. DISPUTE  RESOLUTION:  ATTORNEYS'  FEES. The Company and Executive  agree
that any dispute arising as to the parties'  rights and  obligations  hereunder,
other than with  respect to Section 6, shall be resolved by binding  arbitration
in accordance  with the rules of the American  Arbitration  Association  then in
effect before a private judge to be determined by mutually agreeable means. Each
party  shall have the right,  in addition  to any other  relief  granted by such
arbitrator  (or by any court with  respect  to relief  granted  with  respect to
Section 6), to attorneys' fees based on a  determination  by the arbitrator (or,
with  respect  to  Section  6, the  court) of the extent to which each party has
prevailed as to the material issues raised in determination of the dispute.

     9.  TERMINATION  OF  PRIOR  AGREEMENTS.   This  Agreement   terminates  and
supersedes any and all prior agreements and  understandings  between the parties
with respect to Executive's employment and compensation by the Company, but only
with respect to the matters expressly addressed herein.

     10.  ASSIGNMENT:  SUCCESSORS.  This Agreement is personal in its nature and
neither of the parties hereto shall, without the consent of the other, assign or
transfer this Agreement or any rights or obligations  hereunder;  provided that,
in  the  event  of  the  merger,  consolidation,  transfer,  or  sale  of all or
substantially  all of the assets of the Company with or to any other  individual
or entity,  this Agreement shall,  subject to the provisions  hereof, be binding
upon and inure to the  benefit  of such  successor  and,  such  successor  shall
discharge and perform all the promises,  covenants,  duties,  and obligations of
the Company hereunder.

     11.  GOVERNING  LAW. This  Agreement and the legal  relations  thus created
between the parties  hereto  shall be  governed  by and  construed  under and in
accordance with the laws of the State of California.

     12.  WITHHOLDING.  The Company shall make such deductions and withhold such
amounts  from each payment  made to the  Executive  hereunder as may be required
from time to time by law, governmental regulation or order.

     13.  HEADINGS.  Section  headings in this Agreement are included herein for
convenience  of reference only and shall not constitute a part of this Agreement
for any other purpose.

     14. WAIVER: MODIFICATION. Failure to insist upon strict compliance with any
of the terms,  covenants,  or conditions  hereof shall not be deemed a waiver of
such term, covenant, or condition, nor shall any waiver or relinquishment of, or
failure to insist upon strict  compliance  with, any right or power hereunder at
any one or more  times be deemed a waiver  or  relinquishment  of such  right or
power at any other time or times.  This  Agreement  shall not be modified in any
respect except by a writing executed by each party hereto.

     15. SEVERABILITY: POOLING.

     (a) In the event that a court of competent jurisdiction determines that any
portion of this Agreement is in violation of any statute or public policy,  only
the portions of this  Agreement that violate such statute or public policy shall
be stricken.  All portions of this  Agreement that do not violate any statute or
public policy shall continue in full force and effect.  Further, any court order
striking  any  portion of this  Agreement  shall  modify the  stricken  terms as
narrowly as possible to give as much effect as possible to the intentions of the
parties under this Agreement.

     (b) In the  event  that the  Company  is party  to a  transaction  which is
otherwise  intended to qualify for "pooling of interests"  accounting  treatment
then (A) this Agreement shall, to the extent  practicable,  be interpreted so as
to  permit  such  accounting  treatment,,  and  (13)  to  the  extent  that  the
application  of  clause  (A)  of  this  Section  15(b)  does  not  preserve  the
availability  of  such  accounting  treatment,  then,  to the  extent  that  any
provision  of  the  Agreement   disqualifies  the  transaction  as  a  "pooling"
transaction  (including,  if applicable,  the entire Agreement),  such provision
shall be null and void as of the date  hereof.  All  determinations  under  this
Section 15(b) shall be made by the accounting firm whose opinion with respect to
"pooling of  interests" is required as a condition to the  consummation  of such
transaction.

     16.  INDEMNIFICATION.  The Company and its subsidiaries shall indemnify and
hold  Executive  harmless for acts and  omissions in his capacity as an officer,
director or employee of the Company and its  subsidiaries  to the maximum extent
permitted under applicable law.

     17. COUNTERPARTS.  This Agreement may be executed in several  counterparts,
each of which shall be deemed to be an original but all of which  together  will
constitute one and the same instrument.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its  duly  authorized  officer,  and the  Executive  has  hereunto  signed  this
Agreement, as of the date first above written.

                                          AURA SYSTEMS, INC.

                                        By:    Gerald S. Papazian
                                        Its: President

                                        [signature]
                                        Harry Kurtzman