Release Details

Legal Claim Filed Against Pelephone

November 11, 2001
The Securities Authority, Jerusalem, Israel
The Tel Aviv Stock Exchange, Tel-Aviv, Israel
The Registrar of Companies, Jerusalem, Israel

Immediate Report – Legal Claim Filed Against Pelephone.

Dear Sirs,

On the afternoon of November 8, 2001, the subsidiary Pelephone
Communications Ltd. ("Pelephone") sent to the Company's offices a
translation of a claim which was filed in the Ramallah District Court by
The General Public Palestinian Communications Co. Ltd. ("the Plaintiff"),
inter alia against Pelephone.

According to the claim, the Plaintiff, which is a company registered with
the Registrar of Companies in the West Bank, is involved in the setting up,
operation, supply, sale and management of services and stations for
telephone communication, both landline and mobile, in the West Bank and
the Gaza Strip, except for areas of settlements and IDF installations.

The Plaintiff alleges in its statement of claim that despite having
been awarded exclusivity for providing cellular services in the
West Bank and the Gaza Strip, Pelephone provides, among other things,
cellular services to the inhabitants of the West Bank and the Gaza Strip
without restriction and without a license, thereby breaking the law.

The Plaintiff alleges, inter alia, that due to these activities
of Pelephone, it [the Plaintiff] has sustained and is sustaining
extensive damages and heavy losses, and petitions for payment of
676,065,281 NIS from Pelephone, while reserving the right to claim
additional amounts from 1st July 2001 up to the date on which Pelephone
ceases to provide these services. The Plaintiff also petitions for an
injunction against the provision of cellular services by Pelephone.

Pelephone is studying the claim, and is unable, at this stage,
to estimate its chances, or the actual authority of the Ramallah
District Court to hear the claim.

Yours sincerely,

Shlomo Koppel
Company Secretary

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