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Exhibit 10k

# STOCK OPTION
CANCELLATION AGREEMENT

This
STOCK OPTION CANCELLATION AGREEMENT is made as of the 30th day of November,
2004 (this Agreement), by and between Ampal-American Israel
Corporation, a New York corporation with a principal place of business at 111 Arlozorov
Street, Tel Aviv, 62098, Israel (the Company) and the individual
identified as the Optionee on the signature page attached hereto (the
Optionee).

W
I T N E S S E T H:

WHEREAS,
the Optionee has been granted options (each, a Stock Option and
collectively, the Stock Options) pursuant to the Companys 2000
Incentive Plan (the Plan), to purchase the number of shares of the
Companys Class A Stock, par value $1.00 per share (the Class A
Stock) at the per share exercise price(s) indicated on Schedule A
attached hereto; and

WHEREAS,
the Company desires to cause all of the unexercised, unexpired Stock Options set forth on
Schedule A attached hereto (each, a Terminated Option and
collectively, the Terminated Options) held by the Optionee to be
cancelled and terminated and the Optionee desires to terminate the Terminated Options he
or she holds, such termination to be effective as of the date hereof and on the terms and
conditions set forth in this Agreement.

NOW,
THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the Company and
Optionee agree as follows:

1.        Termination,
Waiver and Release. Effective as of the date hereof, each           Terminated Option
held by the Optionee, whether or not currently exercisable,           and all rights of
the Optionee with respect to the Terminated Options shall be           cancelled and
terminate. Optionee, without further action, hereby waives and           releases any and
all existing or rights, interests or claims the Optionee has,           had, may have had
or will have or may have in the future under the unexercised,           unexpired
Terminated Options.

2.        Optionee
Acknowledgement. Optionee acknowledges that the Optionee has had           a
reasonable opportunity to review this Agreement and has had a reasonable
          opportunity to consult with the Optionees counsel and accountants with
          respect to the terms and legal, financial and tax implications of this
          Agreement.

3.        Optionee
Representations and Covenants. The Optionee hereby represents           and warrants
to the Company that: (a) the number of shares of Class A Stock           subject to the
Terminated Options and the per share exercise price(s) of the           Terminated
Options set forth on Schedule A attached hereto are true and           correct,
(b) the Optionee is the sole beneficial owner of the Terminated           Options, free
and clear of any liens, encumbrances, security agreements,           equities, options,
claims or charges of any kind, and (c) as of the date hereof,           all of the
Terminated Options are unexercised and unexpired and the Optionee has           not
delivered any form of notice of exercise with regard to such Terminated
          Options.



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4.        Miscellaneous.
No amendment or modification of this Agreement shall be           deemed effective unless
made in writing and signed by the parties hereto. This           Agreement may be
executed by the parties hereto in counterparts, each of which           shall be deemed
to be an original. This Agreement shall be governed by and           construed in
accordance with the laws of the State of New York, without giving           effect to the
conflict of law principles thereof. This Agreement contains the           entire
agreement of the parties hereto relating to the subject matter hereof and
          supersedes all prior agreements and understandings, whether oral or written,
          with respect to the subject matter hereof. This Agreement shall be binding on
          and inure to the benefit of the parties to it and their respective heirs, legal
          representatives, successor and assigns, including, without limitation, any
          person to whom any Stock Options may be transferred following the death or
          disability of the Optionee pursuant to the terms of the Stock Option, the Plan
          or otherwise.

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

| | AMPAL-AMERICAN ISRAEL CORPORATION                                              
| | -------------------------------------------------------------------------------
| | BY: /s/ JACK BIGIO
Name: Jack BigioTitle: Chief Executive Officer

| | OPTIONEE/s/ DAFNA SHARIR
Dafna SharirSenior Vice President - Investments
| | --------------------------------------------------------------------------------------

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SCHEDULE A

|Option Grant Date | Number of SharesUnderlying Stock Options | Exercise PricePer Share
|----------------- | ---------------------------------------- | -----------------------
|8/16/02           | 90,000                                   | $3.12                  
|                  |                                          |                        
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