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<TYPE>EX-99.2
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<FILENAME>v05126_99-2.txt
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                                                                    EXHIBIT 99.2

                     DATA SYSTEMS & SOFTWARE INC. ANNOUNCES
                          NASDAQ LISTING PANEL DECISION

MAHWAH, N.J., July 26, 2004  /PRNewswire-FirstCall/ Data Systems & Software Inc.
(Nasdaq:  DSSIC)  today  announced  that the Nasdaq  Listing  Panel had issued a
decision  regarding the  Company's  plans for  compliance  with the $2.5 million
minimum  shareholders  equity  requirement  for continued  listing on The Nasdaq
SmallCap Market.  Pursuant to the Panel's  decision,  the Company's Common Stock
will continue to be listed on The Nasdaq SmallCap Market based upon an exception
to Nasdaq's  Marketplace Rules, subject to the Company fulfilling the conditions
in the decision.

Due to the  continued  listing of the  Company's  Common  Stock  pursuant  to an
exception from the Nasdaq Marketplace Rules,  effective with the commencement of
business on Monday,  July 26, 2004, the trading symbol for the Company's  Common
Stock was  changed  to  "DSSIC".  The  character  "C" will be  removed  from the
Company's  symbol and the symbol  will  revert to "DSSI"  upon  confirmation  to
Nasdaq that the Company has complied  with the terms of the  exception  and with
all other criteria necessary for continued listing of the Company's Common Stock
on The Nasdaq SmallCap Market.

As previously announced, in May 2004 the Company was notified by Nasdaq that its
shareholders  equity as reported in the Company's  quarterly report on Form 10-Q
for the quarter  ended March 31, 2004 was $2.44  million,  marginally  below the
$2.5 million minimum  shareholders  equity  requirement for continued listing on
the Nasdaq SmallCap Market.  At that time, the Company  presented to the Listing
Panel its plan for  short-term  compliance  with the $2.5  million  requirement,
which called for the Company to evidence  compliance in its quarterly report for
the second  quarter of 2004.  The Company's  long-term  plan for  compliance was
based upon  completion  of the  transaction  contemplated  by the  agreement  in
principle  dated  April 19, 2004  between the Company and Kardan  Communications
Ltd.

In its  decision,  the Listing  Panel  determined to continue the listing of the
Company's Common Stock conditional upon the Company  evidencing  compliance with
the $2.5 million shareholders equity requirement in its quarterly report for the
fiscal quarter ended June 30, 2004 to be filed on or before August 16, 2004. The
Listing Panel decision also  conditioned the continued  listing of the Company's
Common Stock upon the Company's  timely filing of all required  reports with the
SEC for all reporting  periods  through the filing of the Form 10-K for the year
ending December 31, 2004.

While  the  Company  believes  that it will  meet  the  Panel's  conditions  for
short-term  compliance,   the  Company  has  not  yet  completed  its  financial
statements  for the period ended June 30, 2004 and  therefore  does not yet have
sufficient  information to determine if it met the minimum  shareholders  equity
requirement  as of that date.  With respect to the Company's  plan for long-term
compliance,  as separately  announced,  the Company was informed today by Kardan
that Kardan does not intend to proceed with the transaction  contemplated  under
the Company's  agreement with Kardan. The Company is exploring  alternatives for
long-term  compliance with the minimum  shareholders  equity requirement and all
other maintenance requirements of The Nasdaq SmallCap Market.


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ABOUT DATA SYSTEMS & SOFTWARE INC.

Data  Systems  &  Software  Inc.  is  a  provider  of  software  consulting  and
development services and is an authorized direct seller and value added reseller
of computer hardware.  Through its Comverge Inc. affiliate, the Company provides
energy intelligence solutions to utilities.

For more information, contact:
George Morgenstern, CEO, (201) 529-2026, ir@dssiinc.com.

This press release includes forward-looking statements, which are subject to
risks and uncertainties. Actual results may vary from those projected or implied
by such forward-looking statements. There is no assurance that (i) the Company
has achieved the results and financial condition for and as of the end of the
second quarter of 2004 which are necessary to evidence compliance in the
Company's Form 10-Q for the second quarter of 2004 with the $2.5 million minimum
shareholders equity requirement as required by the Listing Panel, (ii) the
interim financial statements for second quarter of 2004 and the review of such
statements by the Company's independent auditors will be completed on or before
August 16, 2004, and (iii) the Company will achieve and maintain compliance with
the conditions in the Listing Panel's decision and the maintenance standards of
The Nasdaq SmallCap Market. If the Company is not able to achieve and maintain
compliance with the minimum shareholders equity requirement and the other
conditions for continued listing, the Company's Common Stock will be subject to
being delisted from Nasdaq. A discussion of risks and uncertainties which may
affect the Company's business generally is included in "Business--Factors Which
May Affect Future Results" in the Company's most recent Annual Report on Form
10-K as filed by the Company with the Securities and Exchange Commission.

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