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    WWW.EXFILE.COM, INC. -- 13677 -- MEDIS TECHNOLOGIES LTD. -- CORRESPONDENCE

      [LETTERHEAD
        OF SONNENSCHEIN NATH & ROSENTHAL LLP]

      Stephen
        E. Fox

      212.768.6985

      sfox@sonnenschein.com

              July 12,
                2005

      BY
        EDGAR

      Securities
        and Exchange Commission

      100
        F
        Street, N.E.

      Washington,
        D.C. 20549

                Re:

              Medis Technologies
                Ltd.

              Form 10-K for the fiscal
                year ended
                December 31, 2004

              Filed March 16,
                2005

              File No. 0-30391

      Ladies
        and Gentlemen:

      At
        the
        request of Medis Technologies Ltd. (the “Registrant”), we hereby respond to the
        several comments contained in the Staff’s letter dated May 24, 2005, each of
        which has been reproduced in its entirety herein and is in boldface type.
        Our
        response is immediately below each Staff comment. In particular, we advise
        as
        follows:

      Report
        of Independent Registered Public Accounting Firm, page
        F-2

      We
        note that you changed auditors for your 2003 fiscal year from Ernst & Young,
        U.S., to Kost Forer Gabay & Kasierer, a member of Ernst & Young Global.
        It appears that you did not file a Form 8-K to report this change in auditors.
        Please tell us why.

      The
        Staff’s comment is noted. The Registrant filed with the Commission on July 11,
        2005 a Form 8-K reflecting the change in the office in which Ernst & Young
        signed and issued its audit opinion from Ernst & Young, LLP to Kost Forer
        Gabay & Kasierer.

      Consolidated
        Balance Sheets, page F-4

      Please
        tell us and revise future filings to disclose the nature of and accounting
        for
        your leasehold incentive obligations. Discuss why you reflect $935,000 of
        this
        obligation as an adjustment to reconcile net loss to net cash used in operating
        activities on page F-7.

      We
        advise
        the Staff as follows:

      Pursuant
        to the lease agreement governing the Lod facility, the Registrant committed
        to
        bear the costs of leasehold improvements specified in the agreement, which
        as of
        December 31, 2004 totaled approximately $1.565 million.

      The
        Registrant was responsible for the specifications of the leasehold improvements,
        choosing the vendors and approving the bids and purchase orders. The lessor
        agreed to reimburse the Registrant for a portion of the improvement costs,
        totaling $935,000 as of December 31, 2004.

          Securities
            and Exchange Commission
July 12, 2005
Page 2

      The
        Registrant recorded these improvements as property and equipment in its
        consolidated balance sheet for the fiscal year ended December 31, 2004, in
        accordance with FAS 13, “Accounting for Leases”, and amortizes the assets over
        the shorter of the estimated useful life of the assets or the lease period.

      On
        February 7, 2005, the Commission posted to its web site a letter from the
        Chief
        Accountant of the Commission (the “Chief Accountant’s Letter”) to the AICPA
        Center for Public Company Audit Firms, discussing three lease accounting
        issues.
        One of the issues discussed was Landlord incentives.

      Pursuant
        to the Chief Accountant’s Letter, the Staff took the position that: (a)
        leasehold improvements made by a lessee that are funded by landlord incentives
        or allowances under an operating lease should be recorded by the lessee as
        leasehold improvement assets and amortized by the lessee over the shorter
        of
        their economic lives or the lease term, as defined in paragraph 5(f) of FASB
        Statement 13 ("SFAS 13"), "Accounting for Leases", as amended; (b) the
        incentives should be recorded as deferred rent and amortized as reductions
        to
        lease expense over the lease term in accordance with paragraph 15 of SFAS
        13 and
        the response to Question 2 of FASB Technical Bulletin 88-1 ("FTB 88-1"),
        Issues
        Relating to Accounting for Leases, and therefore, it is inappropriate to
        net the
        deferred rent against the leasehold improvements; and (c) a registrant's
        statement of cash flows should reflect cash received from the lessor that
        is
        accounted for as a lease incentive within operating activities and the
        acquisition of leasehold improvements for cash within investing activities.

      In
        accordance with the guidelines set forth in the Chief Accountant’s Letter, SFAS
        13 and FTB 81-1, the Registrant recorded the landlord incentive in the amount
        of
        $935,000 as a debit to “Leasehold Improvements in Property and Equipment” and
        credited the liability to “Leasehold Incentive Obligations.” In accordance with
        item (c) above, the $935,000 leasehold incentive obligations were reflected
        as
        an adjustment to reconcile net loss to net cash used in operating
        activities.

      The
        Leasehold Improvements in Property and Equipment are amortized over the shorter
        of their economic lives or the lease term. The Leasehold Incentive Obligations
        are amortized over the term of the lease as a reduction of rent
        expenses.

      The
        Registrant has informed us that it will revise future filings to disclose
        the
        nature of and the accounting for the Leasehold Incentive Obligations.

      Note
        G. Stockholder’s Equity, page F-21

      Please
        supplementally show us your calculation of the retroactive adjustment to
        EPS as
        a result of the March 11, 2003 rights issue. See paragraph 56 of SFAS 128.
        Additionally, please tell us and disclose in future filings why you gave
        retroactive adjustment to the rights offering. That is, if true, disclose
        that
        the rights issue contained a bonus element, similar to a stock dividend,
        as a
        result of the exercise price at issuance being less than the fair value of
        your
        common stock. See paragraph 55 of SFAS 128.

      We
        provide to the Staff the following calculation of the retroactive adjustment
        to
        EPS as a result of the Registrant’s March 11, 2003 rights offering:

          Securities
            and Exchange Commission
July 12, 2005
Page 3

                Theoretical
                  ex-rights fair value per share

                Number
                  of shares outstanding immediately prior to rights offering

                21,107,121

                Share
                  price at closing of rights offering (March 11, 2003)

                3.98

                Aggregate
                  fair value of shares immediately prior to exercise of
                  rights

                84,006,342

                Number
                  of shares issuable pursuant to rights offering

                2,325,600

                Exercise
                  price of rights per share

                2.15

                5,000,040

                Aggregate
                  value of shares after rights offering

                89,006,382

                Total
                  shares outstanding after rights offering

                23,432,721

                Theoretical
                  ex-rights fair value per share

                3.80

                Adjustment
                  Factor

                Share
                  price at closing of rights offering (March 11, 2003)

                3.98

                Theoretical
                  ex-rights fair value per share

                3.80

                Adjustment
                  Factor

                1.0474

                Retroactive
                  Adjustment of EPS

                Weighted
                  average shares December 31, 2002 - before retroactive
                  adjustment

                20,894,915

                Adjustment
                  Factor

                1.0474

                Adjusted
                  weighted average shares December 31, 2002

                21,885,334

                Minor
                  difference in calculation that does not result in any change in
                  the net
                  loss per share

                12,537

                Weighted
                  average shares at December 31, 2002. as reported in December 31,
                  2004
                  financial statements

                  21,897,871

                Net
                  loss attributable to common shareholders - December 31,
                  2002

                12,546,000

                Adjusted
                  net loss per share

                0.57

      Additionally,
        we advise the Staff, in accordance with SFAS No. 128 “Earnings Per Share,” that
        basic and diluted net loss per share for the year ended December 31, 2002
        has
        been retroactively adjusted because the Registrant’s March 11, 2003 rights
        offering contained a bonus element that is tantamount to a stock dividend
        due to
        the subscription price at issuance being less than the fair market value
        of the
        Registrant’s common stock on such date.

      The
        Registrant has informed us that it will revise future filings to include
        a
        description of why it gave retroactive adjustment to the rights
        offering.

          Securities
            and Exchange Commission
July 12, 2005
Page 4

      We
        request, if practicable, that further Staff comments be addressed telephonically
        to the undersigned at (212) 768-6985 or, in his absence, to Ira I. Roxland
        of
        this firm at (212) 768-6999.

              Very
                truly yours,

              /s/ Stephen
                E. Fox

                Stephen
                  E. Fox

      cc: Kate
        Tillan (Via Overnight Courier)