SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

[X]  Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934 for the quarterly period ended March 31, 2004

[ ]  Transition  report  pursuant  to Section  13 or 15(d) of the  Securities
     Exchange Act of 1934 for the transition period from ____to ___



                        Commission file number: 000-29871


                                 RADVISION LTD.
                                 --------------
             (Exact Name of Registrant as Specified in Its Charter)

          Israel                                                N/A
          ------                                                ---
(State or Other Jurisdiction of                            (I.R.S. Employer
Incorporation or Organization)                             Identification No.)

                24 Raul Wallenberg Street, Tel Aviv 69719, Israel
                -------------------------------------------------
                    (Address of Principal Executive Offices)

                                 972-3-645-5220
                                 --------------
              (Registrant's Telephone Number, Including Area Code)

                                       N/A
                                       ---
              (Former Name, Former Address and Former Fiscal Year,
                          if Changed Since Last Report)



Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                                 Yes [X] No [ ]

As of May 5, 2004 the Registrant had 19,661,767  Ordinary Shares,  par value NIS
0.1 per share, outstanding.



<PAGE>


    Preliminary Notes: RADVision Ltd. is incorporated in Israel and is a
"foreign private issuer" as defined in Rule 3b-4 under the Securities Exchange
Act of 1934 (the "1934 Act") and in Rule 405 under the Securities Act of 1933.
As a result, it is eligible to file this quarterly report on Form 6-K (in lieu
of Form 10-Q) and to file its annual reports on Form 20-F (in lieu of Form
10-K). However, RADVision Ltd. elects to file its interim reports on Forms 10-Q
and 8-K and to file its annual reports on Form 10-K.

    Pursuant to Rule 3a12-3 regarding foreign private issuers, the proxy
solicitations of RADVision Ltd. are not subject to the disclosure and procedural
requirements of Regulation 14A under the 1934 Act, and transactions in its
equity securities by its officers and directors are exempt from Section 16 of
the 1934 Act.


<PAGE>


                                 RADVISION LTD.

                                      INDEX

                                                                            Page
--------------------------------------------------------------------------------


Part I - Financial Information:

Item 1.  Condensed Consolidated Balance Sheets as of March 31, 2004 and
            December 31, 2003..................................................4

         Condensed Consolidated Statements of Operations -
            for the Three Months ended March 31, 2004 and 2003.................5

         Condensed Consolidated Statements of Cash Flows -
            for the Three Months ended March 31, 2004 and 2003.................6

         Notes to Condensed Consolidated Financial Statements..................7

Item 2.  Management's Discussion and Analysis of
            Financial Condition and Results of Operations.....................12


Item 3.  Quantitative and Qualitative Disclosure About Market Risk............28


Item 4.  Controls and Procedures..............................................29


Part II - Other Information:

Item 1.  Legal Proceedings....................................................30

Item 2.  Changes in Securities and Use of Proceeds............................30

Item 3.  Defaults Upon Senior Securities......................................31

Item 4.  Submission of Matters to a Vote of Security Holders..................31

Item 5.  Other Information....................................................31

Item 6.  Exhibits and Reports on Form 8-K.....................................31

         Signatures...........................................................32


<PAGE>





                                             RADVISION LTD. AND ITS SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------
U.S. dollars in thousands, except share and per share data


<TABLE>
<CAPTION>
                                                              March 31,      December 31,
                                                                2004            2003
                                                            -------------   -------------
                                                              Unaudited        Audited
                                                            -------------   -------------
  <S>                                                        <C>             <C>
     ASSETS
  CURRENT ASSETS:
    Cash and cash equivalents                                $    26,914     $    16,433
    Short-term bank deposits                                       8,022          13,574
    Short-term marketable securities                              11,645          21,403
    Trade receivables (net of allowance for doubtful
     accounts of $ 1,234 and $1,704 as of March 31,
     2004 and December 31, 2003, respectively)                     8,462           8,685
    Other receivables and prepaid expenses                         3,424           2,704
    Inventories                                                    1,187             969
                                                            -------------   -------------
  Total current assets                                            59,654          63,768
                                                            -------------   -------------

  LONG-TERM ASSETS:
    Long-term bank deposits                                       10,403           4,004
    Long-term marketable securities                               45,285          44,497
    Severance pay fund                                             2,205           2,171
                                                            -------------   -------------

  Total long-term assets                                          57,893          50,672
                                                            -------------   -------------
  PROPERTY AND EQUIPMENT, NET                                      2,558           2,572
                                                            -------------   -------------
  Total assets                                                $   120,105     $  117,012
                                                            =============   =============

     LIABILITIES AND SHAREHOLDERS' EQUITY

  CURRENT LIABILITIES:
    Trade payables                                           $     2,825     $     1,270
    Deferred revenues                                              7,718           6,047
    Accrued expenses and other accounts payable                    9,830          13,101
                                                            -------------   -------------
  Total current liabilities                                       20,373          20,418
                                                            -------------   -------------
  ACCRUED SEVERANCE PAY                                            3,332           3,353
                                                            -------------   -------------
  Total liabilities                                               23,705          23,771
                                                            -------------   -------------
  SHAREHOLDERS' EQUITY:
    Ordinary shares of NIS 0.1 par value:
     Authorized - 25,000,000 shares as of March
     31, 2004 and December 31, 2003;
     Issued - 20,152,045 shares as of
     March 31, 2004 and December 31, 2003;
     Outstanding - 19,623,566 shares as of March 31,
     2004 and 19,344,849 shares as of December 31, 2003
    Additional paid-in capital                                       187             187
    Deferred stock compensation                                  104,663         104,663
    Treasury stock, at cost (528,479 and 807,196
     Ordinary shares of NIS 0.1 par value as of
     March 31, 2004 and December 31, 2003, respectively)          (3,320)         (5,075)
    Accumulated deficit                                           (5,130)         (6,534)
                                                            -------------   -------------
  Total shareholders' equity                                      96,400          93,241
                                                            -------------   -------------
  Total liabilities and shareholders' equity                 $   120,105     $   117,012
                                                            =============   =============

</TABLE>


The accompanying notes are an integral part of the consolidated financial
statements.

                                       4

<PAGE>


                                             RADVISION LTD. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
--------------------------------------------------------------------------------
U.S. dollars in thousands, except per share data


                                                     Three months ended
                                                          March 31,
                                               --------------------------------
                                                    2004             2003
                                               ---------------  ---------------
                                                          Unaudited
                                               --------------------------------

 Revenues                                      $     14,261     $     11,053
 Cost of revenues                                     3,097            2,360
                                               ---------------  ---------------
 Gross profit                                        11,164            8,693
                                               ---------------  ---------------

 Operating costs and expenses:
   Research and development                           3,780            3,564
   Marketing and selling                              5,837            4,732
   General and administrative                         1,240              948
   Restructuring income                              (1,061)               -
                                               ---------------  ---------------
 Total operating costs and expenses                   9,796            9,244
 -----                                         ---------------  ---------------

 Operating income (loss)                              1,368             (551)
 Financial income, net                                  412              566
                                               ---------------  ---------------
 Net income                                    $      1,780     $         15
                                               ===============  ===============

 Basic net earnings per Ordinary share         $       0.09     $          -
                                               ===============  ===============

 Diluted earnings per Ordinary share           $       0.08     $          -
                                               ===============  ===============




The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.

                                       5


<PAGE>




                                             RADVISION LTD. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------
U.S. dollars in thousands
<TABLE>
<CAPTION>
                                                                             Three months ended
                                                                                  March 31,
                                                                       -------------------------------
                                                                            2004             2003
                                                                       --------------   --------------
                                                                                  Unaudited
                                                                        -------------------------------
 <S>                                                                    <C>              <C>
 Cash flows from operating activities:
 -------------------------------------
  Net income                                                            $     1,780      $        15
  Adjustments to reconcile net income to net cash provided by
   operating activities:
    Depreciation                                                                530              612
    Accrued interest and amortization of premium on held-to-maturity
     marketable securities and bank deposits                                    832              453
    Severance pay, net                                                          (55)              38
    Amortization of deferred stock-based compensation                             -              117
    Decrease in trade receivables, net                                          223            4,188
    Decrease (increase) in other receivables and prepaid expenses              (634)              67
    Decrease (increase) in inventories                                         (218)             456
    Increase (decrease) in trade payables                                     1,555           (2,450)
    Increase in deferred revenues                                             1,671              325
    Decrease in other payables and accrued expenses                          (3,271)          (1,001)
                                                                       --------------   --------------
 Net cash provided by operating activities                                    2,413            2,820
                                                                       --------------   --------------

 Cash flows from investing activities:
 -------------------------------------
  Proceeds from redemption of held-to-maturity marketable securities         20,380           14,586
  Purchase of held-to-maturity marketable securities                        (11,906)          (4,715)
  Proceeds from withdrawal of bank deposits                                  11,735            2,533
  Purchase of bank deposits                                                 (12,919)               -
  Purchase of property and equipment                                           (516)            (448)
                                                                       --------------   --------------
 Net cash provided by investing activities                                    6,774           11,956
                                                                       --------------   --------------

 Cash flows from financing activities:
 -------------------------------------
  Issuance of Ordinary shares and treasury stock for cash upon
   exercise of options                                                        1,294              142
  Exercise of options by employees                                                -               15
                                                                       --------------   --------------
 Net cash provided by financing activities                                    1,294              157
                                                                       --------------   --------------
 Increase in cash and cash equivalents                                       10,481           14,933
 Cash and cash equivalents at the beginning of the period                    16,433           13,825
                                                                      --------------   --------------
 Cash and cash equivalents at the end of the period                     $    26,914      $    28,758
                                                                       ==============   ==============

 Supplemental disclosure of non-cash flow from investing and
 financing activities:
 ---------------------

  Issuance of Ordinary shares upon sale of Treasury stock               $        86      $       169
                                                                       ==============   ==============
  Loss on issuance of Ordinary shares upon sale of Treasury stock       $       375      $       551
                                                                       ==============   ==============
</TABLE>

The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.

                                       6


<PAGE>


NOTE 1:- GENERAL

          Radvision  Ltd.  ("the  Company"),  an Israeli  corporation,  designs,
          develops and supplies  products and technology  that enable  real-time
          voice, video and data communications  over packet networks,  including
          the Internet and other networks based on the Internet protocol.

          The  Company's  products and  technology  are used by its customers to
          develop systems that enable  enterprises and service  providers to use
          packet networks for real-time IP ("Internet Protocol") communications.

          The  Company   operates   under  two  reportable   segments:   1)  the
          "networking"  business unit (or "NBU"),  which focuses on a networking
          product and is  responsible  for  developing  networking  products for
          IP-centric  voice,  video and data conferencing  services;  and 2) the
          "technology"  business  unit (or  "TBU"),  which  focuses on  creating
          developer  toolkits for the underlying IP communication  protocols and
          testing tools needed for real-time voice and video over IP.

          The Company has four wholly-owned subsidiaries: Radvision Inc., in the
          United States,  Radvision  B.V., in the  Netherlands,  Radvision HK in
          Hong Kong, and Radvision U.K. in the United Kingdom.  The subsidiaries
          are  primarily  engaged  in the sale and  marketing  of the  Company's
          products and technology.

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES

          The significant  accounting  policies  applied in the annual financial
          statements  of  the  Company  as of  December  31,  2003  are  applied
          consistently in these financial statements.

          a.   Use of estimates

               The  preparation  of  financial  statements  in  conformity  with
               generally accepted  accounting  principles requires management to
               make estimates and assumptions  that affect the amounts  reported
               in  the  financial  statements  and  accompanying  notes.  Actual
               results could differ from those estimates.

          b.   For  further  information,  refer to the  consolidated  financial
               statements as of December 31, 2003.

          c.   Accounting for stock-based compensation:

               The  Company has elected to follow  Accounting  Principles  Board
               Opinion No. 25,  "Accounting for Stock Issued to Employees" ("APB
               No.  25") and FASB No.  Interpretation  No. 44,  "Accounting  for
               Certain Transactions Involving Stock Compensation" ("FIN No. 44")
               in accounting for its employee stock option plans.  Under APB No.
               25, when the exercise  price of the  Company's  stock  options is
               less than the market price of the  underlying  shares on the date
               of grant, compensation expense is recognized.

                                        7

<PAGE>



NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)

               Under  Statement  of  Financial   Accounting   Standard  No.  123
               "Accounting for Stock-Based  Compensation  ("SFAS No. 123"),  pro
               forma information regarding net income and net earnings per share
               is  required,  and has  been  determined  as if the  Company  had
               accounted  for its employee  stock  options  under the fair value
               method of SFAS No.  123.  The fair  value for  these  options  is
               amortized  over their vesting period and estimated at the date of
               grant  using a Black - Scholes  Option  Valuation  Model with the
               following weighted-average assumptions for the three months ended
               March 31, 2004 and 2003:

<TABLE>
<CAPTION>
                                                                           Three months ended
                                                                               March 31,
                                                                      ----------------------------
                                                                          2004           2003
                                                                      ------------   -------------
                                                                                Unaudited
                                                                      ----------------------------
              <S>                                                       <C>            <C>
              Risk free interest                                            2.47%            2%
              Dividend yields                                                 0%             0%
              Volatility                                                    0.438           0.44
              Expected life                                                   4              4

              Pro forma information under SFAS No. 123:

              Net income as reported                                    $   1,780      $       15
                                                                      ============   =============

              Add: stock based compensation expense determined
                under APB 25                                            $       -      $       22
                                                                      ============   =============

              Deduct: stock-based compensation expense
                determined under fair value method for all awards       $     870      $      867
                                                                      ============   =============

              Pro forma net loss                                        $     910      $     (830)
                                                                      ============   =============

              Basic earnings per share, as reported                     $     0.09     $        -
                                                                      ============   =============

              Diluted earnings per share, as reported                   $     0.08     $        -
                                                                      ============   =============

              Pro forma basic net income (loss) per share               $     0.05     $    (0.04)
                                                                      ============   =============

              Pro forma diluted net income (loss) per share             $     0.04     $    (0.04)
                                                                      ============   =============
</TABLE>

                                        8


<PAGE>



NOTE 3:- UNAUDITED INTERIM FINANCIAL STATEMENTS

          The accompanying  unaudited interim consolidated  financial statements
          have been prepared in accordance  with generally  accepted  accounting
          principles for interim financial information. Accordingly, they do not
          include  all the  information  and  footnotes  required  by  generally
          accepted accounting principles for complete financial  statements.  In
          the  opinion of  management,  all  adjustments  (consisting  of normal
          recurring accruals)  considered necessary for a fair presentation have
          been included.  Operating results for the three months ended March 31,
          2004 are not necessarily  indicative of the results of operations that
          may be expected for the year ended December 31, 2004.


NOTE 4:- INVENTORIES

                                                  March 31,        December 31,
                                                     2004              2003
                                                 --------------   --------------
                                                  Unaudited          Audited
                                                 ---------------   -------------

           Raw materials                          $      435        $     361
           Work in progress                              648              490
           Finished products                             104              118
                                                 --------------   --------------
                                                  $    1,187        $     969
                                                 ==============   ==============


NOTE 5:- ACCRUED EXPENSES AND OTHER ACCOUNTS PAYABLE


           Employees and employee accruals        $    2,144        $   2,415
           Accrued expenses                            7,686           10,686
                                                 --------------   --------------
                                                  $    9,830        $  13,101
                                                 ==============   ==============

NOTE 6:- RESTRUCTURING INCOME

          In January 2001,  the Company  entered into an agreement  with related
          parties to lease  approximately  24,000 square feet of office space in
          Paramus,  New Jersey for a period of 5 years,  which space the Company
          subsequently  surrendered.  The parties have a dispute with respect to
          damages  caused by this action,  if any. In December 2003, the parties
          proceeded to binding arbitration.  The presiding arbitrator issued his
          final  ruling on  February  12,  2004  stating  the amount owed by the
          Company  is $ 400.  The  Company  recorded  an  amount  of $ 1,061  as
          restructuring  income,  representing  the  surplus of its  accruals in
          former periods.

                                       9


<PAGE>


NOTE 7:- SEGMENTS AND CUSTOMER INFORMATION

                                                     Three months ended
                                                         March 31,
                                                -----------------------------
                                                    2004            2003
                                                -------------   -------------
                                                         Unaudited
                                                -----------------------------
            Revenues:
              Product sales                     $   10,166      $    7,686
              Software sales                         4,095           3,367
                                                -------------   -------------
            Total revenues                      $   14,261      $   11,053
            -----                               =============   =============

            Cost of revenues:
              Product sales                     $    2,827      $    2,353
              Software sales                           270               7
                                                -------------   -------------
            Total cost of revenues              $    3,097      $    2,360
            -----                               =============   =============


NOTE 8:- EARNINGS PER SHARE

          The following  table sets forth the  calculation  of basic and diluted
          earnings per share:

                                                           Three months ended
                                                               March 31,
                                                       -------------------------
                                                           2004           2003
                                                       ------------   ----------
                                                               Unaudited
                                                       -------------------------
     Numerator:
       Net income                                      $     1,780   $        15
                                                       ============  ===========
       Diluted earnings per share - income             $     1,780   $        15
                                                       ============  ===========

     Number of shares:
       Denominator:
        Denominator for basic earnings per
         share - weighted average of Ordinary shares    19,484,208    18,331,538
        Effect of dilutive securities:
        Employee stock options and unvested
         restricted shares                               2,082,575       993,035
                                                       ------------  -----------
                                                        21,566,783    19,324,573
                                                       ============  ===========


                                       10


<PAGE>


NOTE 9:- SIGNIFICANT EVENTS

          During the first quarter of 2004,  certain of the Company's  employees
          exercised their options to purchase the Company's  shares,  which were
          included  as  Treasury  stock.  As a result of this  transaction,  the
          Company has recorded a loss in the amount of approximately $ 375 as an
          addition to accumulated deficit.




                             - - - - - - - - - - - -


                                       11


<PAGE>



Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations
        ------------------------------------------------------------------------

This information should be read in conjunction with the condensed consolidated
financial statements and notes included in Item 1 of Part I of this Quarterly
Report and the audited financial statements and notes thereto and Management's
Discussion and Analysis of Financial Condition and Results of Operations for the
year ended December 31, 2003 contained in our 2003 Annual Report on Form 10-K.
The discussion and analysis which follows may contain trend analysis and other
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934 which reflect our current views with respect to future
events and financial results. These include statements regarding our earnings,
projected growth and forecasts, and similar matters that are not historical
facts. We remind shareholders that forward-looking statements are merely
predictions and therefore are inherently subject to uncertainties and other
factors that could cause the future results to differ materially from those
described in the forward-looking statements. These uncertainties and other
factors include, but are not limited to, the uncertainties and factors included
in the section entitled "Risk Factors" and elsewhere in this Quarterly Report.

Overview

We are the industry's leading provider of high quality, scalable and easy-to-use
products and technologies for videoconferencing, video telephony, and the
development of converged voice, video and data over IP and 3G networks. We have
approximately 450 customers worldwide including Alcatel, Cisco, FastWeb,
NTT/DoCoMo, Philips, Panasonic, Samsung, Shanghai Bell, Siemens, Sony and
Tandberg. Hundreds of thousands of end-users around the world today communicate
over a wide variety of networks using products and solutions based on or built
around our multimedia communication platforms and software development
solutions.

In the beginning of 2001, we created two separate business units corresponding
to our two product lines to enable our product development and product marketing
teams to respond quickly to evolving market needs with new product
introductions.

Our Networking Business Unit, or NBU, offers one of the broadest and most
complete set of multimedia communication and videoconferencing network solutions
for IP, ISDN, SIP and 3G-based networks, supporting most end points in the
industry today. These products are sold primarily to resellers and OEMs who use
this infrastructure to develop and install advanced IP and ISDN-based
communication systems for enterprise customers. The NBU also provides service
providers, both 3G wireless and wireline, with integrated solutions that enable
the delivery of converged IP-based multimedia streaming and video telephony
applications to corporate customers as a managed service, residential broadband
customers, and 3G subscribers worldwide.

Our Technology Business Unit, or TBU, is a one-stop shop of voice and video over
IP and 3G Development toolkits. The TBU provides protocol development tools and
platforms, as well as associated solutions such as testing platforms and IP
phone toolkits that enable equipment vendors and service providers to develop
and deploy new IP and 3G-based converged networks, services, and technologies.
Our TBU also provides professional services to our customers,

                                       12

<PAGE>


assisting them with integrating our technology into their products. RADVISION's
TBU solutions include developer toolkits for SIP, MEGACO/H.248, MGCP, H.323, and
3G-324M. It also includes RADVISION's ProLab(TM) Test Management Suite and IP
phone toolkit. Today you may find RADVISION toolkits implemented in a wide range
of environments from chipsets to simple user devices like IP phones, and from
integrated video systems through carrier class network devices like gateways,
switches, soft switches and 3G multimedia gateways.

        Our Strategy

Our goal is to be the leading provider of innovative products and technologies
that enable real-time multimedia collaboration (voice, video and data)
communication over packet networks. We provide solutions at every level -
protocol developer toolkits, professional services, network infrastructure, and
even integrated solutions that compliment the communication solutions of other
vendors such as those from Cisco and Microsoft. We believe that the combination
of offering IP-centric networking products and software toolkits uniquely
positions us as a key enabling vendor in the evolution of IP communication. Both
of our product lines are essential for building IP networks that support real
time voice and video communication with full interoperability with legacy
ISDN/PSTN networks and technologies.

Critical Accounting Judgments

The preparation of financial statements in conformity with U.S. GAAP requires
estimates and assumptions that affect the reported amounts of assets and
liabilities, revenues and expenses, and related disclosures of contingent assets
and liabilities in the consolidated financial statements and accompanying notes.
The SEC has defined a company's critical accounting policies as the ones that
are most important to the portrayal of the company's financial condition and
results of operations, and which require the company to make its most difficult
and subjective judgments, often as a result of the need to make estimates of
matters that are inherently uncertain. Based on this definition, we have
identified the critical accounting policies and judgments addressed below. We
also have other key accounting policies, which involve the use of estimates,
judgments, and assumptions that are significant to understanding our results.
For additional information, see Item 1 of Part I, "Financial Statements - Note 2
- Significant Accounting Policies," of this Quarterly Report on Form 10-Q and
Item 8 of Part II, "Financial Statements and Supplementary Data - Note 2 -
Significant Accounting Policies," of our Annual Report on Form 10-K for the year
ended December 31, 2003. Although we believe that our estimates, assumptions,
and judgments are reasonable, they are based upon information presently
available. Actual results may differ significantly from these estimates under
different assumptions, judgments, or conditions.

Critical Accounting Policies

Inventories. Inventories are stated at the lower of cost or market. Cost is
determined by the moving average method, inventory write-offs and write-down
provisions are provided to cover risks arising from slow-moving items or
technological obsolescence.

Revenue Recognition. We recognize revenues in respect of products when, among
other things, we have delivered the goods being purchased and we believe
collectibility to be reasonably assured. We do not grant a right of return to
our customers. We perform ongoing credit

                                       13

<PAGE>


evaluations of our customers' financial condition and we require collateral as
deemed necessary. We maintain allowances for doubtful accounts for estimated
losses resulting from the inability of our customers to make payments. In
judging the adequacy of the allowance for doubtful accounts, we consider
multiple factors including the aging of our receivables, historical bad debt
experience and the general economic environment. Management applies considerable
judgment in assessing the realization of receivables, including assessing the
probability of collection and the current creditworthiness of each customer. If
the financial condition of our customers were to deteriorate, resulting in an
impairment of their ability to make payments, additional allowances may be
required.

Warranty Reserves. Upon shipment of products to our customers, we provide for
the estimated cost to repair or replace products that may be returned under
warranty. Our warranty period is typically 12 months from the date of shipment
to the end user customer. For existing products, the reserve is estimated based
on actual historical experience. For new products, the warranty reserve is based
on historical experience of similar products until such time as sufficient
historical data has been collected on the new product. Factors that may impact
our warranty costs in the future include our reliance on our contract
manufacturer to provide quality products and the fact that our products are
complex and may contain undetected defects, errors or failures in either the
hardware or the software. Warranty reserves amounted to $550,000 and $350,000 at
December 31, 2003 and 2002, respectively.

Results of Operations

The following table presents, as a percentage of total revenues, condensed
statements of operations data for the periods indicated:

                                                              Three months
                                                             ended March 31,
                                                             ---------------
                                                              2004     2003
                                                              ----     ----
                                                                %        %
        Revenues
           Networking products..............................  71.3     70.0
           Technology products..............................  28.7     30.0
           Total revenues................................... 100.0    100.0
        Cost of revenues
           Networking products..............................  19.8     21.3
           Technology products..............................   1.9      0.1
           Total cost of revenues...........................  21.7     21.4
        Gross profit........................................  78.3     78.6
        Operating expenses
           Research and development.........................  26.5     32.2
           Marketing and selling............................  40.9     42.8
           General and administrative.......................   8.7      8.6
        Total operating expenses............................  76.1     83.6
        Operating income (loss), before restructuring
           income...........................................   2.2     (5.0)
        Restructuring income                                   7.4      -
        Operating income (loss)                                9.6     (5.0)
        Financial income....................................   2.9      5.1
        Net income..........................................  12.5      0.1


                                       14

<PAGE>




Three  Months  Ended March 31, 2004  Compared  with Three Months Ended March 31,
2003

Revenues. We generate revenues from sales of our networking products that are
primarily sold in the form of stand-alone products, and our technology products
that are primarily sold in the form of software development kits, as well as
related maintenance and support services. We generally recognize revenues from
the sale of our products upon shipment and when collection is probable. Revenues
generated from maintenance and support services are deferred and recognized
ratably over the period of the term of service. We price our networking products
on a per unit basis, and grant discounts based upon unit volumes. We price our
software development kits on the basis of a fixed-fee plus royalties from
products developed using the software development kits. We sell our products and
technology through direct sales and various indirect distribution channels in
North America, Europe, the Middle East and the Far East.

Our revenues increased from $11.1 million for the three months ended March 31,
2003 to $14.3 million for the three months ended March 31, 2004. This increase
was due to a $2.5 million increase in sales of our networking products, and a
$730,000 increase in sales of our technology products. The results reflect
better than expected TBU product sales with especially strong sales in the U.S.
and Asia Pacific. The results include on-target performance by our NBU, with
better than forecast sales in the U.S. and EMEA, offsetting lower than expected
Asia Pacific sales due to a slow start to the quarter in China.

Revenues from networking products increased from $7.7 million for the three
months ended March 31, 2003 to $10.2 million for the three months ended March
31, 2004, an increase of $2.5 million or 32%. Revenues from sales of our ViaIP
product lines increased from $5.3 million in the three months ended March 31,
2003 to $9.9 million in the three months ended March 31, 2004. This increase was
offset in great measure by a decrease in revenues of $1.3 million from other
product sales and $900,000 from our OnLan product line.

Revenues from technology products increased from $3.4 million for the three
months ended March 31, 2003 to $4.1 million for the three months ended March 31,
2004. Revenues from licenses and royalties increased from $1.3 million and
$563,000 in the three months ended March 31, 2003 to $1.8 million and $900,000,
respectively, in the three months ended March 31, 2004. Maintenance revenues
declined from $1.3 million in the three months ended March 31, 2003 period to $1
million in the three months ended March 31, 2004, which decline was offset in
part from increased revenue from professional services with respect to research
and development, which activity accounted for $400,000 in revenues in the three
months ended March 31, 2004 compared to $230,000 in the three months ended March
31, 2003.

Revenues from sales to customers in the United States increased from $4.4
million, or 39.6% of revenues, for the three months ended March 31, 2003 to $8.0
million, or 55.9% of revenues. For the three months ended March 31, 2004, an
increase of $3.6 million, or 81.8%. This increase in sales to customers in the
United States was primarily attributable to increased market demand for our
networking products in this region.

                                       15

<PAGE>




Revenues from sales to customers in Europe and the Middle East increased from
$3.7 million for the three month period ended March 31, 2003, or 33.3% of
revenues, to $4.0 million, or 28.0% of revenues, for the three months ended
March 31, 2004.

Revenues from sales to customers in the Asian Pacific region decreased from $3.0
million, or 27.0% of revenues, for the three months ended March 31, 2003 to $2.3
million, or 16.1% of revenues, for the three months ended March 31, 2004, a
decrease of $700,000 or 23.3% due to a slow start in the quarter in China.

Cost of Revenues. Cost of revenues increased from $2.4 million for the three
month period ended March 31, 2003 to $3.1 million for the three months ended
March 31, 2004, an increase of $740,000, or 31.3%. Gross profit as a percentage
of revenues decreased slightly from 78.6% for the three months ended March 31,
2003 to 78.3% for the three months ended March 31, 2004, due to the increased
proportion of NBU product sales that have lower profit margins.

Research and Development. Research and development expenses increased from $3.6
million for the three months ended March 31, 2003 to $3.8 million for the three
months ended March 31, 2004, an increase of $200,000 or 5.6%.

Marketing and Selling. Marketing and selling expenses increased from $4.7
million for the three months ended March 31, 2003 to $5.8 million for the three
months ended March 31, 2004, an increase of $1.1 million or 23.4%. Marketing and
selling expenses as a percentage of revenues decreased from 42.3% for the three
months ended March 31, 2003 to 40.6% for the three months ended March 31, 2004.
This increase was primarily attributable to an increase in personnel expenses.

General and Administrative. General and administrative expenses increased from
$948,000 for the three months ended March 31, 2003 to $1.2 million for the three
months ended March 31, 2004, an increase of $300,000 or 31.6%. This increase was
primarily attributable to an increase in personnel expenses. General and
administrative expenses as a percentage of revenues were 8.6% for the three
months ended March 31, 2003 and 8.4% for the three months ended March 31, 2004.

Operating Gain (Loss). We recorded an operating gain of $307,000 before a
restructuring income of $1.1 million, or $1.4 million including the
restructuring income, for the three months ended March 31, 2004 as compared to a
operating loss of $551,000 for the three months ended March 31, 2003. The
restructuring income represents the surplus of accruals recorded in former
periods relating to an arbitration involving our company and the related parties
from whom we had leased office space that was subsequently surrendered.

Financial Income. We recorded financial income of $412,000 for the three months
ended March 31, 2004 compared to $566,000 for the three months ended March 31,
2004. This income was principally derived from the investment of the proceeds of
our March 2000 initial public offering and private placement. Our financial
income declined principally as a result of lower prevailing interest rates.

                                       16

<PAGE>




Liquidity and Capital Resources

We generated $2.4 million from operating activities for the three months ended
March 31, 2004 compared to $2.8 million in the same period in 2003. This amount
was primarily attributable to higher net income of $1.8 million, a $220,000
decrease in trade receivables, an increase of $1.5 million in trade payables,
and depreciation expenses of $530,000. These increases in cash generated by our
operating activities were offset in part by a $1.6 million decrease in other
payables, deferred revenues and accrued expenses. The increase in inventories
for the three months ended March 31, 2004 was primarily due to increased
revenues. Net cash provided by investing activities was approximately $6.8
million for the three months ended March 31, 2004. During the three months ended
March 31, 2004, $516,000 of cash used in investing activities was for purchases
of property and equipment.

Our financing activities generated $1.3 million for the three months ended March
31, 2004 compared to $157,000 in the same period in 2003. This amount was
primarily attributable to proceeds from the exercise of employee stock options.

Our capital requirements are dependent on many factors, including market
acceptance of our products and the allocation of resources to our research and
development efforts, as well as our marketing and sales activities. We plan to
pursue strategic initiatives and make operating investments in 2004 as we
position our company to realize on what we perceive to be increasing market
opportunities in the coming years. We anticipate that our cash resources will be
used primarily to fund our operating activities, as well as for capital
expenditures. We do not believe that our capital expenditures and lease
commitments will increase for the foreseeable future due to the anticipated
slowdown in the growth of our operations, infrastructure and personnel.
Nevertheless, we may establish additional operations as we expand globally.

We plan to pursue strategic initiatives and make operating investments in 2004
as we position our company to realize what we perceive to be increasing market
opportunities in the coming years.

On February 28, 2001, we announced that our board of directors had authorized
the repurchase of up to 10% of our outstanding shares in open market
transactions from time to time at prevailing market prices. We completed the
share repurchase program in the first fiscal quarter of 2002, having purchased
1,866,115 ordinary shares at a total cost of $11.8 million, or an average price
of $6.30 per share. At the beginning of 2003, we began to reissue the
repurchased shares upon exercise of employee stock options.

On August 28, 2002, we announced that our board of directors had authorized the
repurchase of up to $10 million or 2 million of our ordinary shares in the open
market from time to time at prevailing market prices. During April 2003, we
started to repurchase our ordinary shares based on the instruction of our board
of directors. As of March 31, 2004 we had purchased 14,000 ordinary shares at a
total cost of $78,000, or an average price of $5.55 per share.

                                       17

<PAGE>




        Off-Balance Sheet Arrangements

We are not a party to any material off-balance sheet arrangements. In addition,
we have no unconsolidated special purpose financing or partnership entities that
are likely to create material contingent obligations.

        Contractual Obligations

The following table summarizes our contractual obligations and commercial
commitments, including obligations of discontinued operations, as of March 31,
2004.

<TABLE>
<CAPTION>
Contractual Obligations                                 Payments due by Period
-----------------------------------  -----------------------------------------------------------
                                                 less than                             more than
                                       Total       1 year    1-3 Years    3-5 Years     5 years
                                       -----       ------    ---------    ---------     -------
<S>                                  <C>         <C>           <C>         <C>             <C>
Long-term debt obligations.....          -           -           -            -            -
Capital (finance) lease obligations      -           -           -            -            -
Operating lease obligations....      $2,974,000  $1,895,000    $980,000    $99,000         -
Purchase obligations...........          -           -           -            -            -
Other long-term liabilities
  reflected on the Company's
  balance sheet under  U.S. GAAP         -           -           -            -            -
                                     ----------  ----------    --------    -------      --------
Total..........................      $2,974,000  $1,895,000    $980,000    $99,000         -
</TABLE>

        Second Quarter 2004 Guidance

          o    Second quarter net sales are expected to be  approximately  $15.2
               million,  an increase of  approximately  $3.6 million,  or 31.0%,
               compared with the second quarter 2003.

          o    Net income is expected to increase to  approximately  $650,000 or
               $0.03 per share,  a 358% increase  compared  with second  quarter
               2003.

These projections are subject to substantial uncertainty that could cause our
future results to differ materially from the guidance we have provided.

Risk Factors

Risks Relating to Our Business

Until  2001,  we had a history of losses  and we cannot  assure you that we will
continue to operate profitably in the future.

Although we operated profitably in 2003 we cannot assure you that we will
continue to operate profitably in the future. We incurred significant losses in
every fiscal year from our inception until 1999, and we incurred operating
losses in 2000 and 2001. As of December 31, 2003, our accumulated deficit was
$6.5 million.

                                       18

<PAGE>




Our  quarterly  financial  performance  is likely to vary  significantly  in the
future.  Our revenues and operating results in any quarter may not be indicative
of our future  performance and it may be difficult for investors to evaluate our
prospects.

Our quarterly revenues and operating results have varied significantly in the
past and are likely to continue to vary significantly in the future.
Fluctuations in our quarterly financial performance may result from the fact
that we may receive a small number of relatively large orders in any given
quarter. Because these orders generate disproportionately large revenues, our
revenues and the rate of growth of our revenues for that quarter may reach
levels that may not be sustained in subsequent quarters. In addition, some of
our products have lengthy sales cycles. For example, it typically takes from
three to twelve months after we first begin discussions with a prospective
customer before we receive an order from that customer. We also have a limited
order backlog, which makes revenues in any quarter substantially dependent upon
orders we deliver in that quarter. Because of these factors, our revenues and
operating results in any quarter may not meet market expectations or be
indicative of future performance and it may be difficult for investors to
evaluate our prospects.

Unless our revenues grow in excess of our  increasing  expenses,  we will not be
profitable.

We expect that our operating expenses will increase significantly in the future,
both to finance the planned expansion of our sales and marketing and research
and development activities and to fund the anticipated growth in our revenues.
However, our revenues may not grow apace or even continue at their current
level. If our revenues do not increase as anticipated or if expenses increase at
a greater pace than our revenues, we will not be profitable. Even if we achieve
profitability, we may not be able to sustain or increase profitability on a
quarterly or annual basis.

If the use of packet-based  networks as a medium for real-time voice,  video and
data  communication  does not continue to grow,  the demand for our products and
technology will slow and our revenues will decline.

Our future success depends on the growth in the use of packet-based networks,
including the Internet and other IP networks, as a medium for real-time voice,
video and data communication. If the use of packet-based networks does not
expand, the demand for our products and technology will slow and our revenues
will decline. Market acceptance of packet-based networks as a viable alternative
to circuit-switched networks for the transmission of real-time voice and video
communication is not proven and may be inhibited by concerns about quality of
service and potentially inadequate development of the necessary infrastructure.

We must  develop  new  products  and  technology  and  enhancements  to existing
products and technology to remain competitive.  If we fail to do so, we may lose
market share to our competitors and our revenues may decline.

The market for our products and technology is characterized by rapid
technological change, new and improved product introductions, changes in
customer requirements and evolving industry standards. Our future success will
depend to a substantial extent on our ability to:

     o    timely identify new market trends; and

                                       19

<PAGE>




     o    develop,   introduce  and  support  new  and  enhanced   products  and
          technology on a successful and timely basis.

If we fail to develop  and deploy new  products  and  technology  or product and
technology  enhancements  on a successful  and timely basis,  we may lose market
share to our competitors and our revenues may decline.

We are currently developing new products and technology and enhancements to our
existing products and technology. We may not be successful in developing or
introducing these or any other new products or technology to the market.

We have invested,  and will continue to invest,  in products and technology that
comply with those  industry  standards  that we believe  have been,  or will be,
broadly  adopted.  If one or more  alternative  standards  were to gain  greater
acceptance  than the standards that we believe have or will be broadly  adopted,
sales of our products and technology might suffer.

Currently, we offer networking products that comply with the H.323 industry
standard for real-time voice, video and data communication over packet networks.
During 2000, we expanded our enabling technology product family to include
additional key IP protocols. Our current suite of IP communication protocol
toolkits include H.323, SIP, MGCP, MEGACO and H.324M. We believe that IP
networks will be designed with components built around each of these protocols.
If these expectations ultimately prove to be incorrect, our investments may be
of little or no value.

We rely on a small number of  marketing  partners  who  distribute  our products
either under our name or as private label products for a significant  portion of
our business.

We rely in great measure on OEMs, systems integrators and value added resellers,
or VARs, to sell our products. Our OEM customers purchase our products to
integrate with products that they developed in-house to build complete IP
communication solutions. Our systems integrator customers either purchase our
full suite of products or integrate our individual products of other
manufacturers to build complete IP communication solutions. Our VAR customers
purchase our products to resell to end-users as separate units, or as part of a
family of related product offerings, either under our RADVISION label or under
their private label. If we are unable to maintain these marketing partners or
obtain new marketing partners, our future revenues and profitability will be
affected and we may lose market share.

Competition  in the markets for our products and  technology is intense.  We may
not be able to compete effectively in these markets and we may lose market share
to our competitors.

The markets for our products and technology are highly competitive and we expect
competition to intensify in the future. We may not be able to compete
effectively in these markets and we may lose market share to our competitors.
The principal competitors in the market for our NBU products currently include
Polycom Inc., which acquired Accord Networks Inc., First Virtual Communication,
which merged with CUseeMe Networks Inc. (formerly known as White Pine Software
Inc.). The principal competitors in the market for our TBU products currently
include Hughes Software Systems, DynamicSoft, Dylithium, and in-house developers
employed by



                                       20

<PAGE>


manufacturers of telecommunication equipment and systems. Additional competitors
may enter each of our markets at any time. Moreover, our customers may seek to
develop internally the products that we currently sell to them and compete with
us.

Major  solutions  providers who currently  work with us might compete with us in
the future.

We currently provide our technology to major solutions providers including
Cisco, Siemens, Microsoft and Tanldberg. If these providers choose to develop
their own technologies, acquire technologies from our competitors, or acquire
such competitors, our financial condition and operating results could be
adversely impacted and we may face increased levels of competition from these
major companies.

Our software  development kit revenues will decrease if our customers  choose to
use source code that is available for free.

Both Vovida Networks, Inc. (part of Cisco Systems Inc.) and OpenH323 offer H.323
source code for free. In addition, Vovida offers MGCP and SIP source code for
free. If our customers choose to use the free source code offered by these
organizations instead of purchasing our technology, our revenues from the sale
of our software development kits will decline. Other companies, including
Microsoft, may offer similar development kits as part of their product
offerings.

Most of our competitors have greater resources than we do. This may limit our
ability to compete effectively with them and discourage customers from
purchasing our products and technology.

Most of our competitors have greater financial, personnel and other resources
than we do, which may limit our ability to compete effectively with them. These
competitors may be able to respond more quickly to new or emerging technologies
or changes in customer requirements. These competitors may also:

     o    benefit from greater economies of scale;

     o    offer more aggressive pricing; or

     o    devote greater resources to the promotion of their products.

Any of these advantages may discourage customers from purchasing our products
and technology. If we are unable to compete successfully against our existing or
potential competitors, our revenues and margins will decline.

Our  agreements  with  our  customers  generally  do not have  minimum  purchase
requirements.  If our customers  decrease or cease  purchasing  our products and
technology, our revenues will decline.

Our agreements with our customers generally do not have minimum purchase
requirements nor do they require our customers to purchase any products from us.
If any or all of our customers cease to purchase or reduce their purchases of
our products and technology at any time, our revenues will decline. We cannot
assure you that our customers will not choose to independently develop for
themselves, or purchase from others, products and technology similar to our
products

                                       21

<PAGE>


and technology. Moreover, if our customers do not successfully market and sell
the systems and products into which they incorporate our products and
technology, the demand of these customers for our products and technology will
decline. Our customers' sales of systems and products containing our products
and technology may be adversely affected by circumstances over which we have no
control and over which our customers may have little, if any, control.

We are dependent upon a limited number of suppliers of key components.  If these
suppliers  delay  or  discontinue  manufacture  of  these  components,   we  may
experience  delays in shipments,  increased costs and cancellation of orders for
our products.

We currently obtain key components used in the manufacture of our products from
a single supplier or from a limited number of suppliers. We do not have
long-term supply contracts with our suppliers. Any delays in delivery of or
shortages in these components could interrupt and delay manufacturing of our
products and result in the cancellation of orders for our products. In addition,
these suppliers could discontinue the manufacture or supply of these components
at any time. We may not be able to identify and integrate alternative sources of
supply in a timely fashion or at all. Any transition to alternate suppliers may
result in delays in shipment and increased expenses and may limit our ability to
deliver products to our customers. Furthermore, if we are unable to identify an
alternative source of supply, we would have to modify our products to use a
substitute component, which may cause delays in shipments, increased design and
manufacturing costs and increased prices for our products.

We intend to  manufacture  and maintain an inventory of customized  products for
some customers who will have no obligation to purchase these products.  If these
customers fail to purchase these products, our financial results may be harmed.

To satisfy the timing requirements of some of our larger customers, we intend to
manufacture and maintain an inventory of some of our products that we will
customize to the specifications of these customers. The size of this inventory
will be based upon the purchasing history and forecasts of these customers,
which we currently estimate to be approximately two months of sales to these
customers. These customers will have no obligation to purchase the inventoried
products at any time. If the customers for whom the inventoried products are
manufactured do not purchase them, we may be required to modify the products for
sale to others and we may be unable to find other purchasers. In either case,
the value of the products may be materially diminished which may have a negative
impact on our financial results.

Undetected errors may increase our costs and impair the market acceptance of our
products and technology.

Our products and technology have occasionally contained, and may in the future
contain, undetected errors when first introduced or when new versions are
released. Our customers integrate our products and technology into systems and
products that they develop themselves or acquire from other vendors. As a
result, when problems occur in equipment or a system into which our products or
technology have been incorporated, it may be difficult to identify the cause of
the problem. Regardless of the source of these errors, we must divert the
attention of our engineering personnel from our research and development efforts
to address the errors. We cannot assure you that we will not incur warranty or
repair costs, be subject to liability claims for damages related to product
errors or experience delays as a result of these errors in the future.

                                       22

<PAGE>


Any insurance policies that we may have, may not provide sufficient protection
or coverage should a claim be asserted. Moreover, the occurrence of errors,
whether caused by our products or technology or the products of another vendor,
may result in significant customer relations problems and injury to our
reputation and may impair the market acceptance of our products and technology.

We rely on third  party  technology  licenses.  If we are unable to  continue to
license this  technology on reasonable  terms, we may face delays in releases of
our  products  and may be required to reduce the  functionality  of our products
derived from this technology.

We rely on technology that we license from third parties, including software
that is integrated with internally developed software and used in our products
to perform key functions. For example, we license T.120 data collaboration
software from Data Connection Limited and voice compression technology from
Siemens. If we are unable to continue to license any of this software on
commercially reasonable terms, we will face delays in releases of our products
or will be required to reduce the functionality of our products until equivalent
technology can be identified, licensed or developed, and integrated into our
current products.

Third parties may infringe upon or  misappropriate  our  intellectual  property,
which could impair our ability to compete  effectively and negatively affect our
profitability.

Our success depends upon the protection of our technology, trade secrets and
trademarks. Our profitability could suffer if third parties infringe upon our
intellectual property rights or misappropriate our technology and other assets
or the intellectual property rights licensed from third parties. To protect our
rights to our intellectual property, we rely on a combination of trade secret
protection, trademark law, confidentiality agreements and other contractual
arrangements. We rely on third parties to protect their intellectual property
which is licensed to us, but we do not generally investigate to what extent such
intellectual property is protected. The protective steps we have taken may be
inadequate to deter infringement or misappropriation. We may be unable to detect
the unauthorized use of our intellectual property or take appropriate steps to
enforce our intellectual property rights. Policing unauthorized use of our
products and technology is difficult. In addition, the laws of some foreign
countries in which we currently or may in the future sell our products do not
protect our proprietary rights to as great an extent as do the laws of the
United States. Failure to adequately protect or to promptly detect unauthorized
use of our intellectual property could devalue our proprietary content and
impair our ability to compete effectively. Further, defending our intellectual
property rights could result in the expenditure of significant financial and
managerial resources, whether or not the defense is successful.

Our products may infringe on the intellectual  property rights of others,  which
could increase our costs and negatively affect our profitability.

Third parties may assert against us infringement claims or claims that we have
infringed a patent, copyright, trademark or other proprietary right belonging to
them. For example, in 1998, Lucent alleged that some products manufactured by us
infringed specified Lucent patents. Any infringement claim, even if not
meritorious, could result in the expenditure of significant financial and
managerial resources and could negatively affect our profitability.

                                       23

<PAGE>




We are  dependent  on our senior  management.  Any loss of the  services  of our
senior management could negatively affect our business.

Our future success depends to a large extent on the continued services of our
senior management and key personnel. We do not carry key-man life insurance for
any of our senior management. Any loss of the services of members of our senior
management or other key personnel could negatively affect our business.

Our failure to retain and attract personnel could harm our business,  operations
and product development efforts.

Our products require sophisticated research and development, marketing and
sales, and technical customer support. Our success depends on our ability to
attract, train and retain qualified research and development, marketing and
sales and technical customer support personnel. We intend to increase
substantially the number of our employees who perform these functions.
Competition for personnel in all of these areas is intense and we may not be
able to hire sufficient personnel to achieve our goals or support the
anticipated growth in our business. The market for the highly-trained personnel
we require is very competitive, due to the limited number of people available
with the necessary technical skills and understanding of our products and
technology. If we fail to attract and retain qualified personnel, our business,
operations and product development efforts would suffer.

Our non-competition agreements with our employees may not be enforceable. If any
of these  employees  leaves  us and joins a  competitor,  our  competitor  could
benefit from the expertise our former employee gained while working for us.

We currently have non-competition agreements with our key employees in Israel.
These agreements prohibit those employees, if they cease to work for us, from
directly competing with us or working for our competitors. Under current U.S.
and Israeli law, we may not be able to enforce these non-competition agreements.
If we are unable to enforce any of these agreements, our competitors that employ
our former employees could benefit from the expertise our former employees
gained while working for us. In addition, we do not have non-competition
agreements with our employees outside of Israel.

Government  regulation  could delay or prevent product  offerings,  resulting in
decreased revenues.

Our products are designed to operate with local telephone systems throughout the
world and therefore must comply with the regulations of the Federal
Communication Commission and other regulations affecting the transmission of
voice, video and data over telecommunication and other media. Each time we
introduce a new product, we are required to obtain regulatory approval in the
countries in which it is offered. In addition, we must periodically obtain
renewals of the regulatory approvals for the use of our products in countries
where we have already obtained approval. We cannot assure you that regulatory
approval for our current products will be renewed or that regulatory approval
for future products will be obtained. If we do not obtain the necessary
approvals and renewals, we may be required to delay the sales of our products in
those countries until approval for use is granted or renewed. This could result
in decreased revenues.

                                       24

<PAGE>




Risks Relating to Our Location in Israel

Conditions in Israel affect our  operations and may limit our ability to produce
and sell our products, which could decrease our revenues.

We are incorporated under the laws of Israel, and most of our offices and our
production facilities are located in the State of Israel. As a result, the
political, economic and military conditions in Israel directly influence us. Any
major hostilities involving Israel or the interruption or curtailment of trade
between Israel and its present trading partners could have a material adverse
effect on our business, financial condition and results of operations. Since the
establishment of the State of Israel in 1948, a state of hostility has existed,
varying in degree and intensity, between Israel and the Arab countries in the
region. While Israel has entered into peace agreements with both Egypt and
Jordan and several other countries have announced their intentions to establish
trade and other relations with Israel, Israel has not entered into any
additional peace agreements with such countries or with Syria or Lebanon. Peace
talks between Israel and the Palestinian Authority began in the early 1990s, but
broke down in mid-2000. Attacks on Israel by Palestinian terrorists, and
military responses by Israel, have accelerated considerably since late 2000. The
continued hostilities between the Palestinian community and Israel and the
failure to settle the conflict has had and continues to have a material adverse
effect on the Israeli economy and may have a material adverse effect on our
business and us. Further expansion of hostilities might require more widespread
military reserve service by some of our employees, which may have a material
adverse effect on our business. We cannot predict whether or when the peace
process will resume, whether a full resolution of these problems will be
achieved, the nature of any such resolution or the consequences that any of
these factors may have on us.

The economic conditions in Israel have not been stable in recent years.

As a result of political instability, the increased level of hostilities with
the Palestinian Authority and the world-wide economic crisis in the high-tech
and communication industries, the Israeli rate of economic growth deteriorated
in 2001 and 2002, the Israeli currency was devalued and the rate of inflation
increased. The Israeli Government has proposed certain budgetary cuts and other
changes. Although with the assistance of the U.S. Government economic stability
was reached in 2003 and the rate of inflation was negative for the first time in
2003 since the establishment of the State, we cannot assure you that the Israeli
Government will be successful in its attempts to stabilize the Israeli economy
or to maintain Israel's current credit rating. Should Israel's credit rating
decline, the ability of the Israeli government to generate foreign financial and
economic assistance may be adversely affected. Economic decline as well as price
and exchange rate instability may have a material adverse effect on us.

Some of our  directors,  officers and employees are obligated to perform  annual
military reserve duty in Israel.  We cannot assess the potential impact of these
obligations on our business.

Our directors, officers and employees who are male adult citizens and permanent
residents of Israel under the age of 48 are, unless exempt, are obligated to
perform annual military reserve duty and are subject to being called to active
duty at any time under emergency circumstances. We cannot assess the full impact
of these requirements on our workforce or business if

                                       25

<PAGE>


conditions should change, and we cannot predict the effect on our business in
the event of an expansion or reduction of these obligations.

Because most of our revenues are generated in U.S.  dollars or are linked to the
U.S. dollar while a portion of our expenses are incurred in new Israeli shekels,
our results of operations would be adversely  affected if inflation in Israel is
not offset on a timely basis by a devaluation  of the new Israeli shekel against
the U.S. dollar.

Most of our revenues are in dollars or are linked to the dollar, while a portion
of our expenses, principally salaries and the related personnel expenses, are in
new Israeli shekels, or NIS. As a result, we are exposed to the risk that the
rate of inflation in Israel will exceed the rate of devaluation of the NIS in
relation to the dollar or that the timing of this devaluation lags behind
inflation in Israel. This would have the effect of increasing the dollar cost of
our operations. In 1999 and 2000 while the rate of inflation was low, there was
a devaluation of the dollar against the NIS. In the years 2001 and 2002 the rate
of devaluation of the NIS against the dollar exceeded the rate of inflation. In
2003 there was a devaluation of the dollar against the NIS. We cannot predict
any future trends in the rate of inflation in Israel or the rate of devaluation
of the NIS against the dollar. If the dollar cost of our operations in Israel
increases, our dollar-measured results of operations will be adversely affected.

The tax benefits that we currently receive from our approved enterprise programs
require  us to  satisfy  specified  conditions.  If we  fail  to  satisfy  these
conditions,  we may be  required  to pay  additional  taxes and would  likely be
denied these benefits in the future.

The Investment Center of the Israeli Ministry of Industry and Trade has granted
approved enterprise status to several investment programs at our manufacturing
facility. The portion of our income derived from these approved enterprise
programs commencing when we begin to generate net income from these programs
will be exempt from tax for a period of two years and will be subject to a
reduced tax rate for an additional five to eight years, depending on the
percentage of our share capital held by non-Israelis. The benefits available to
an approved enterprise program are dependent upon the fulfillment of conditions
stipulated in applicable law and in the certificate of approval. If we fail to
comply with these conditions, in whole or in part, we may be required to pay
additional taxes during the period in which we would have benefited from the tax
exemption or reduced tax rates and would likely be denied these benefits in the
future.

It may be  difficult  to  enforce  a U.S.  judgment  against  us and most of our
officers  and  directors or to assert U.S.  securities  laws claims in Israel or
serve process on most of our officers and directors.

We are incorporated in Israel. Many of our executive officers and directors are
nonresidents of the United States, and a substantial portion of our assets and
the assets of these persons are located outside the United States. Therefore, it
may be difficult for an investor, or any other person or entity, to enforce a
U.S. court judgment based upon the civil liability provisions of the U.S.
federal securities laws in an Israeli court against us or any of those persons
or to effect service of process upon these persons in the United States.
Additionally, it may be difficult for an investor, or any other person or
entity, to enforce civil liabilities under U.S. federal securities laws in
original actions instituted in Israel.

                                       26

<PAGE>




Risks Relating to Our Ordinary Shares

Holders of our ordinary  shares who are United States  residents face income tax
risks.

There is a risk that we will be classified as a passive foreign investment
company, or PFIC. Our treatment as a PFIC could result in a reduction in the
after-tax return to the holders of our ordinary shares and would likely cause a
reduction in the value of such shares. For U.S. Federal income tax purposes, we
will be classified as a PFIC for any taxable year in which either (i) 75% or
more of our gross income is passive income, or (ii) at least 50% of the average
value of all of our assets for the taxable year produce or are held for the
production of passive income. For this purpose, passive income includes
dividends, interest, royalties, rents, annuities and the excess of gains over
losses from the disposition of assets that produce passive income. If we were
determined to be a PFIC for U.S. federal income tax purposes, highly complex
rules would apply to U.S. Holders owning ordinary shares. Accordingly, you are
urged to consult your tax advisors regarding the application of such rules.

As a result of our substantial cash position, if the value of our stock
declines, there is a substantial risk that we will be classified as a PFIC under
the asset test described in the preceding paragraph. Based on an independent
third party opinion, we believe that we were not deemed to be classified as a
PFIC in 2002, and as a result of the increase in the value of our stock, we
believe that we were not deemed to be classified as a PFIC in 2003. We have,
however, no assurance that the U.S. Internal Revenue Services will accept this
determination and there can be no assurance that we will not be classified as a
PFIC in the future.

Our share price has been volatile in the past and may decline in the future.

Our ordinary shares have experienced significant market price and volume
fluctuations in the past and may experience significant market price and volume
fluctuations in the future in response to factors such as the following, some of
which are beyond our control:

     o    quarterly variations in our operating results;

     o    operating  results  that  vary  from the  expectations  of  securities
          analysts and investors;

     o    changes  in  expectations  as to  our  future  financial  performance,
          including financial estimates by securities analysts and investors;

     o    announcements  of  technological  innovations or new products by us or
          our competitors;

     o    announcements  by us or  our  competitors  of  significant  contracts,
          acquisitions,   strategic  partnerships,  joint  ventures  or  capital
          commitments;

     o    changes in the status of our intellectual property rights;

     o    announcements  by third parties of  significant  claims or proceedings
          against us;

     o    additions or departures of key personnel;

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<PAGE>




     o    future sales of our ordinary shares; and

     o    stock market price and volume fluctuations.

Domestic and international stock markets often experience extreme price and
volume fluctuations. Market fluctuations, as well as general political and
economic conditions, such as a recession or interest rate or currency rate
fluctuations or political events or hostilities in or surrounding Israel, could
adversely affect the market price of our ordinary shares.

In the past, securities class action litigation has been brought against a
company following periods of volatility in the market price of its securities.
We could potentially in the future be the target of similar litigation.
Securities litigation could result in substantial costs and divert management's
attention and resources.

Anti-takeover provisions could negatively impact our shareholders.

The new Israeli Companies Law provides that an acquisition of shares in a public
company must be made by means of a tender offer if as a result of the
acquisition the purchaser would become a 25% shareholder of the company. This
rule does not apply if there is already another 25% shareholder of the company.
Similarly, the Israeli Companies Law provides that an acquisition of shares in a
public company must be made by means of a tender offer if as a result of the
acquisition the purchaser would become a 45% shareholder of the company. There
is an exception to this provision, if someone else is already a majority
shareholder of the company. Regulations under the Companies Law provide that the
Companies Law's tender offer rules do not apply to a company whose shares are
publicly traded outside of Israel, if pursuant to the applicable foreign
securities laws and stock exchange rules there is a restriction on the
acquisition of any level of control of the company, or if the acquisition of any
level of control of the company requires the purchaser to make a tender offer to
the public shareholders.

Finally, Israeli tax law treats certain acquisitions, particularly
stock-for-stock swaps between an Israeli company and a foreign company, less
favorably than United States tax law. Israeli tax law may, for instance, subject
a shareholder who exchanges his company shares for shares in a foreign
corporation to immediate taxation.

Item 3. Quantitative and Qualitative Disclosure About Market Risk
        ---------------------------------------------------------

Interest Rate Risk

As of March 31, 2004, we had cash and cash equivalents and short-term
investments of $46.6 million. We invest our cash surplus in time deposits, cash
deposits, U.S. federal agency securities and corporate bonds with an average
credit rating of A2. These investments are not purchased for trading or other
speculative purposes. Due to the nature of these investments, we believe that we
do not have a material exposure to market risk.

Our exposure to market risks for changes in interest rates is limited since we
do not have any material indebtedness.

                                       28

<PAGE>




Foreign Currency Exchange Risk

We develop products in Israel and sell them in North America, Asia and several
European countries. As a result our financial results could be affected by
factors such as changes in foreign currency exchange rates or weak economic
conditions in foreign markets.

Our foreign currency exposure with respect to our sales is mitigated, and we
expect it will continue to be mitigated, through salaries, materials and support
operations, in which part of these costs are denominated in NIS.

During 2003, the NIS revalued approximately 7.6% against the dollar. Among the
factors contributing to the revaluation are the low interest rate for US$
investments compared to the higher interest rate for NIS investments. The
revaluation has resulted in a deflation in Israel, which was approximately 1.9%
for the year 2003 compared to an annual inflation rate of 6.5% for 2002 and
deflation of 0.1% for the three months ended March 31, 2004.

Since most of our sales are quoted in $, and a portion of our expenses are
incurred in NIS, our results may be adversely affected by a change in the rate
of inflation in Israel or if such change in the rate of inflation is not offset,
or is offset on a lagging basis, by a corresponding devaluation of the NIS
against the dollar and other foreign currencies.

We did not enter into any foreign exchange contracts in 2003 or the first
quarter of 2004.

Item 4. Controls and Procedures
        -----------------------

Under the supervision and with the participation of our management, including
our chief executive officer and chief financial officer, we carried out an
evaluation of the effectiveness of the design and operation of our company's
disclosure controls and procedures pursuant to Rule 13a-14 of the Securities
Exchange Act of 1934. Based upon that evaluation, our chief executive officer
and chief financial officer concluded that our disclosure controls and
procedures were effective as of the end of the period covered by this quarterly
report.

There have been no significant changes in our internal controls or other factors
which could significantly affect internal controls subsequent to the date we
carried out the evaluation.

It should be noted that any system of controls, however well designed and
operated, can provide only reasonable, and not absolute, assurance that the
objectives of the system are met. In addition, the design of any control system
is based in part upon certain assumptions about the likelihood of future events.
Because of these and other inherent limitations of control systems, there can be
no assurance that any design will succeed in achieving its stated goals under
all potential future conditions.


                                       29

<PAGE>



                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings
        -----------------

We are not involved in any legal proceedings that are material to our business
or financial condition.

Item 2. Changes in Securities and Use of Proceeds
        -----------------------------------------

Use of Proceeds. The following information required by Item 701(f) of Regulation
S-K relates to our initial public offering of ordinary shares of our company on
March 14, 2000. The following table sets forth, with respect to the ordinary
shares registered, the amount of securities registered, the aggregate offering
price of amount registered, the amount sold and the aggregate offering price of
the amount sold, for both the account of our company and the account of any
selling security holder.

                                                             For the account of
                                           For the account      the selling
                                           of the company       shareholder
                                           ---------------   ------------------
  Number of ordinary shares registered ..       4,370,000          N/A
  Aggregate offering price of shares
     registered .........................     $87,400,000          N/A
  Number of ordinary shares sold ........       4,370,000          N/A
  Aggregate offering price of shares sold     $87,400,000          N/A



The following table sets forth the expenses incurred by us in connection with
our public offering during the period commencing the effective date of the
Registration Statement and ending March 31, 2004. None of such expenses were
paid directly or indirectly to directors, officers, persons owning 10% or more
of any class of equity securities of our company or to our affiliates.

                                                  Direct or indirect payments to
                                                  persons other than affiliated
                                                             persons
                                                  ------------------------------
                                                          $6,118,000
       Underwriting discounts and commissions ...
       Finders' fees ............................            550,000
       Expenses paid to or for underwriters......             41,290
       Other expenses ...........................          2,241,113
                                                           ---------
       Total expenses ...........................         $8,950,403
                                                          ==========

The net public offering proceeds to us, after deducting the total expenses (set
forth in the table above), were $78,449,597.

The following table sets forth the amount of net public offering proceeds used
by us for the purposes listed below. None of such payments were paid directly or
indirectly to directors, officers, persons owning 10% or more of any class of
our equity securities or to our affiliates.

                                       30

<PAGE>






                                                 Direct or indirect payments
                                                 to persons other than to
Purpose                                          affiliated persons
-----------------------------------------------  ---------------------------
 Acquisition of other companies and
  business(es) ..............................                 N/A
 Construction of plant, building and facilities               N/A
 Purchase and installation of machinery
   and equipment ............................                 N/A
 Purchase of real estate ....................                 N/A
 Repayment of indebtedness ..................                 N/A
 Working capital ............................             $78,450,000
 Temporary investments ......................                 N/A
 Other purposes .............................                 N/A

Item 3. Defaults Upon Senior Securities
        -------------------------------

          None

Item 4. Submission of Matters to a Vote of Security Holders
        ---------------------------------------------------

          None

Item 5. Other Information
        -----------------

          None

Item 6. Exhibits and Reports on Form 8-K
        --------------------------------

(a) Exhibits

        31.1   Certification by Chief Executive  Officer Pursuant to Section 302
               of the  Sarbanes-Oxley  Act of 2002.
        31.2   Certification by Chief Financial  Officer Pursuant to Section 302
               of the  Sarbanes-Oxley  Act of 2002.
        32.1   Certification by Chief Executive Officer Pursuant to 18 U.S.C.
               Section 1350, As Adopted Pursuant to Section 906 of the
               Sarbanes-Oxley Act of 2002.
        32.2   Certification by Chief Financial Officer Pursuant to 18 U.S.C.
               Section 1350, As Adopted Pursuant to Section 906 of the
               Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K filed during the last quarter of the period covered by
this report:

An 8-K bearing the cover date of February 3, 2004 with respect to a press
release regarding the Registrant's earning for the three months and year ended
December 31, 2003 was filed on February 3, 2004.

                                       31



<PAGE>


                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                            RADVISION LTD.
                                               (Registrant)



                                           /s/Gad Tamari
                                           -------------
                                           Gad Tamari
                                           Chief Executive Officer



                                           /s/Tsipi Kagan
                                           --------------
                                           Tsipi Kagan
                                           Chief Financial Officer


Date:  May 10, 2004

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