UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 8-K
                                 CURRENT REPORT

                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


        Date of Report (Date of earliest event reported) August 17, 2006
                                                         ---------------


                          DATA SYSTEMS & SOFTWARE INC.
           (Exact name of Registrants as Specified in their Charters)


           Delaware                     0-19771                 22-2786081
--------------------------------------------------------------------------------
(States or Other Jurisdiction   (Commission file Numbers)     (IRS Employer
      of Incorporation)                                    Identification Nos.)


                 200 Route 17, Mahwah, New Jersey           07430
             -------------------------------------------------------
             (Address of Principal Executive Offices)     (Zip Code)


        Registrants' telephone number, including area code (201) 529-2026
                                                           --------------


Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions:

[_]  Written communications pursuant to Rule 425 under the Securities Act
     (17 CFR 230.425)

[_]  Soliciting material pursuant to Rule 14a-2 under the Exchange Act
     (17 CFR 240.14a-2)

[_]  Pre-commencement communications pursuant to Rule 14d-2(b) under the
     Exchange Act (17 CFR 240.14d-2(b))

[_]  Pre-commencement communications pursuant to Rule 13e-4(c) under the
     Exchange Act (17 CFR 240.13e-4(c))


<PAGE>


Item 8.01         Other Events.

         On August 7, 2006 we consummated the purchase of an  approximately  23%
interest in Paketeria GmbH. A description of the transaction can be found in the
Company's  Quarterly  Report on Form 10-Q for the three  months  ended  June 30,
2006,  filed with the SEC on August 11,  2006.  The  agreements  entered into in
connection with the purchase are attached as exhibits hereto.


Item 9.01         Financial Statements and Exhibits

(d)      Exhibits

Exhibit No.       Description
-----------       -----------

10.1              Form of Common Stock Purchase Agreement

10.2              Form of Note Purchase Agreement with Form of Convertible
                  Promissory Note attached

10.3              Form of Stock Purchase Agreement

10.4              Form of Investors' Rights Agreement

10.5              Form of Non-Plan Option Agreement


<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 hereunto duly authorized on this 23rd day of August, 2006.


                                    DATA SYSTEMS & SOFTWARE INC.


                                    By:      /s/ Sheldon Krause
                                             -----------------------------
                                    Name:    Sheldon Krause
                                    Title:   Secretary and General Counsel
{"company-data": {"conformed-name": "DATA SYSTEMS & SOFTWARE INC", "cik": "0000880984", "assigned-sic": "7371", "irs-number": "222786081", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-19771", "film-number": "061051171"}, "business-address": {"street1": "200 RTE 17", "city": "MAHWAH", "state": "NJ", "zip": "07430", "phone": "2015292026"}, "mail-address": {"street1": "200 ROUTE 17", "city": "MAHWAH", "state": "NJ", "zip": "07430"}, "former-company": {"former-conformed-name": "DEFENSE SOFTWARE & SYSTEMS INC", "date-changed": "19930328"}}
UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 8-K
                                 CURRENT REPORT

                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

        Date of Report (Date of earliest event reported) August 17, 2006
                                                         ---------------

                          DATA SYSTEMS & SOFTWARE INC.
           (Exact name of Registrants as Specified in their Charters)

           Delaware                     0-19771                 22-2786081
--------------------------------------------------------------------------------
(States or Other Jurisdiction   (Commission file Numbers)     (IRS Employer
      of Incorporation)                                    Identification Nos.)

                 200 Route 17, Mahwah, New Jersey           07430
             -------------------------------------------------------
             (Address of Principal Executive Offices)     (Zip Code)

        Registrants' telephone number, including area code (201) 529-2026
                                                           --------------

Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions:

[_]  Written communications pursuant to Rule 425 under the Securities Act
     (17 CFR 230.425)

[_]  Soliciting material pursuant to Rule 14a-2 under the Exchange Act
     (17 CFR 240.14a-2)

[_]  Pre-commencement communications pursuant to Rule 14d-2(b) under the
     Exchange Act (17 CFR 240.14d-2(b))

[_]  Pre-commencement communications pursuant to Rule 13e-4(c) under the
     Exchange Act (17 CFR 240.13e-4(c))
Item 8.01         Other Events.

         On August 7, 2006 we consummated the purchase of an  approximately  23%
interest in Paketeria GmbH. A description of the transaction can be found in the
Company's  Quarterly  Report on Form 10-Q for the three  months  ended  June 30,
2006,  filed with the SEC on August 11,  2006.  The  agreements  entered into in
connection with the purchase are attached as exhibits hereto.

Item 9.01         Financial Statements and Exhibits

(d)      Exhibits

Exhibit No.       Description
-----------       -----------

10.1              Form of Common Stock Purchase Agreement

10.2              Form of Note Purchase Agreement with Form of Convertible
                  Promissory Note attached

10.3              Form of Stock Purchase Agreement

10.4              Form of Investors' Rights Agreement

10.5              Form of Non-Plan Option Agreement
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 hereunto duly authorized on this 23rd day of August, 2006.

                                    DATA SYSTEMS & SOFTWARE INC.

                                    By:      /s/ Sheldon Krause
                                             -----------------------------
                                    Name:    Sheldon Krause
                                    Title:   Secretary and General Counsel