<PAGE>   1
  As filed with the Securities and Exchange Commission on December 31, 1998
                                                     Registration No. 333-______

                      =====================================

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

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

                                    FORM S-8
             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

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

                            PARADIGM GEOPHYSICAL LTD.
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                           <C>
         ISRAEL                                                        NOT APPLICABLE
(State or other jurisdiction of incorporation                 (I.R.S. Employer Identification Number)
or organization)
</TABLE>

                                 MERKAZIM HOUSE
                                32 MASKIT STREET
                                   P.O.B. 2061
                                HERZLIA B, ISRAEL
                                 972-9-970-9300

   (Address, including zip code, of registrant's principal executive offices)

                                KEY EMPLOYEE PLAN
                           MAY 1994 STOCK OPTION PLAN
                         1994 GENERAL STOCK OPTION PLAN
             1997 STOCK OPTION PLAN FOR QUALIFYING ISRAEL EMPLOYEES
                        1997 EXECUTIVE STOCK OPTION PLAN
                    1997 STOCK OPTION PLAN FOR U.S. EMPLOYEES

                           (FULL TITLES OF THE PLANS)

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

                           PARADIGM GEOPHYSICAL CORP.
                                 2401 PORTSMOUTH
                              HOUSTON, TEXAS 77098
                                  713-630-3800

            (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)

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

      Copies of all communications, including all communications sent to the
agent for service, should be sent to:


ANDREW C. FREEDMAN, ESQ. AND                       DAVID EFRATI, ADV. AND
  RICHARD H. GILDEN, ESQ.                            IAN ROSTOWSKY, ADV.
FULBRIGHT & JAWORSKI L.L.P.                          EFRATI GALILI & CO.
      666 FIFTH AVENUE                               6 WISSOTSKY STREET
  NEW YORK, NEW YORK 10103                         TEL AVIV, ISRAEL 62338
       (212) 318-3000                                011-972-3-605-1010
 FACSIMILE: (212) 752-5958                      FACSIMILE: 011-972-3-604-0111

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

                      =====================================
<PAGE>   2
                         CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
                                                                                             PROPOSED
                                                                                              MAXIMUM          AMOUNT OF
                                               AMOUNT TO BE       PROPOSED MAXIMUM           AGGREGATE        REGISTRATION
    TITLE OF SECURITIES TO BE REGISTERED      REGISTERED (1)  OFFERING PRICE PER SHARE    OFFERING PRICE          FEE
    ------------------------------------      --------------  ------------------------    --------------      ------------
<S>                                             <C>                  <C>                     <C>                 <C>      
ORDINARY SHARES, NIS 0.5 PAR VALUE PER                                                                                  
SHARE REPRESENTED BY OPTIONS GRANTED              63,336
PURSUANT TO THE KEY EMPLOYEE PLAN ..........      SHARES              $0.59(2)               $37,368             $10.39

ORDINARY SHARES, NIS 0.5 PAR VALUE PER                                                                                  
SHARE, REPRESENTED BY OPTIONS GRANTED
PURSUANT TO THE MAY 1994 STOCK OPTION            114,678
PLAN........................................      SHARES              $2.50(3)               $286,695            $79.62

ORDINARY SHARES, NIS 0.5 PAR VALUE PER                                                                                  
SHARE, REPRESENTED BY OPTIONS GRANTED
PURSUANT TO THE MAY 1994 STOCK OPTION            111,506
PLAN........................................      SHARES              $4.00(3)               $446,024            $124.00

ORDINARY SHARES, NIS 0.5 PAR VALUE PER                                                                                  
SHARE, REPRESENTED BY OPTIONS GRANTED
PURSUANT TO THE 1994 GENERAL STOCK OPTION         60,176
PLAN........................................      SHARES              $7.00(4)               $421,232            $117.10

ORDINARY SHARES, NIS 0.5 PAR VALUE PER                                                                                  
SHARE, REPRESENTED BY OPTIONS GRANTED
PURSUANT TO THE 1997 STOCK OPTION PLAN FOR       558,486
QUALIFIYING ISRAEL EMPLOYEES................      SHARES              $7.00(5)               $3,909,402          $1,086.81

ORDINARY SHARES, NIS 0.5 PAR VALUE PER                                                                                  
SHARE, REPRESENTED BY OPTIONS GRANTED
PURSUANT TO THE 1997 EXECUTIVE STOCK             418,934
OPTION PLAN.................................      SHARES              $7.00(6)               $2,932,538          $815.25

ORDINARY SHARES, NIS 0.5 PAR VALUE PER                                                                                  
SHARE, REPRESENTED BY OPTIONS GRANTED
PURSUANT TO THE 1997 EXECUTIVE STOCK
OPTION PLAN.................................      30,000              $9.00(6)               $270,000            $75.06

ORDINARY SHARES, NIS 0.5 PAR VALUE PER                                                                                  
SHARE, REPRESENTED BY OPTIONS GRANTED
PURSUANT TO THE 1997 STOCK OPTION PLAN FOR       235,500
U.S. EMPLOYEES..............................      SHARES              $7.00(7)               $1,648,500          $458.28

ORDINARY SHARES, NIS 0.5 PAR VALUE PER                                                                                  
SHARE, REPRESENTED BY OPTIONS RESERVED FOR
ISSUANCE UNDER THE 1997 STOCK OPTION PLAN
FOR QUALIFYING ISRAEL EMPLOYEES, THE 1997
EXECUTIVE STOCK OPTION PLAN, AND THE 1997        707,384
STOCK OPTION PLAN FOR U.S. EMPLOYEES........      SHARES             $4.625(8)               $3,271,651.00       $909.52

TOTAL MAXIMUM OFFERING AND                      2,300,000               N/A                  $13,223,410.00      $3,676.11
REGISTRATION FEE............................      SHARES
</TABLE>



(1)      An additional indeterminable number of shares are also being registered
         to cover any adjustments required by anti-dilution provisions in the
         number of shares issuable upon the exercise of options granted under
         the Key Employee Plan, the May 1994 Stock Option Plan, the 1994 General
         Stock Option Plan, the 1997 Stock Option Plan for Qualifying Israel
         Employees, the 1997 Executive Stock Option Plan and the 1997 Stock
         Option Plan for U.S. Employees.

(2)      Represents the price at which options may be exercised under the Key
         Employee Plan.

(3)      Represents the price at which certain options may be exercised under
         the May 1994 Stock Option Plan.

(4)      Represents the price at which options may be exercised under the 1994
         General Stock Option Plan.

(5)      Represents the price at which options may be exercised under the 1997
         Stock Option Plan for Qualifying Israel Employees.

(6)      Represents the price at which options may be exercised under the 1997
         Executive Stock Option Plan.

(7)      Represents the price at which options may be exercised under the 1997
         Stock Option Plan for U.S. Employees.

(8)      The price is estimated in accordance with Rule 457(h)(1) under the
         Securities Act of 1933, as amended, solely for the purpose of
         calculating the registration fee and is the average of the high and low
         prices of Paradigm Geophysical Ltd. Ordinary Shares as reported on the
         Nasdaq National Market on December 25, 1998.


                                        2
<PAGE>   3
                                     PART I

         The document(s) containing the information called for in Part I of Form
S-8 will be sent or given to employees awarded options under the Key Employee
Plan, the May 1994 Stock Option Plan, the 1994 General Stock Option Plan, the
1997 Stock Option Plan for Qualifying Israel Employees, the 1997 Executive Stock
Option Plan, and the 1997 Stock Option Plan for U.S. Employees (collectively
referred to as the "Plans"), adopted by Paradigm Geophysical Ltd. (the "Company"
or the "Registrant") and are not being filed with or included in this Form S-8
in accordance with the rules and regulations of the Securities and Exchange
Commission (the "Commission").


                                        3
<PAGE>   4
                                     PART II

ITEM 3.           INCORPORATION OF DOCUMENTS BY REFERENCE.

         The following documents filed by the Company with the Commission are
incorporated herein by reference:

         (i)      The Company's prospectus dated June 10, 1998, as filed with
                  the Commission pursuant to Rule 424(b) under the Securities
                  Act of 1933.

         (ii)     The description of the Company's Ordinary Shares contained in
                  its Registration Statement on Form 8-A (File No. 0-29538) as
                  filed with the Commission pursuant to the Securities Exchange
                  Act of 1934, as amended, on November 24, 1997 and as may be
                  further amended, modified or superseded by any report or
                  amendment filed with the Commission for the purpose of
                  updating such description.

         (iii)    The Company's Report of Foreign Private Issuers on Form 6-K
                  dated August 3, 1998 and October 28, 1998 and each Form 6-K
                  subsequently submitted to the Commission, in which the Company
                  specifically indicates that such Form 6-K is incorporated by
                  reference into this Form.

         In addition to the foregoing, all other documents subsequently filed by
the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended, prior to the filing of a post-effective
amendment indicating that all of the securities offered hereunder have been sold
or deregistering all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated by reference in this Registration Statement shall be deemed to be
modified or superseded for purposes of this Registration Statement to the extent
that a statement contained herein or in any subsequently filed document that is
also incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.

ITEM     4.       DESCRIPTION OF SECURITIES.

         Not applicable.

ITEM 5.           INTERESTS OF NAMED EXPERTS AND COUNSEL.

         The validity of the shares being offered hereby and certain other legal
matters in connection with the offering of such securities will be passed upon
for the Company by Efrati Galili & Co., Tel Aviv, Israel, Israeli counsel to the
Company.


                                        4
<PAGE>   5
ITEM 6.           INDEMNIFICATION OF DIRECTORS AND OFFICERS.

         Section 96 of the Companies Ordinance (New Version),1983, as amended
(the "Companies Ordinance") permits a company's Articles of Association to
provide that (i) the company may insure a director or officer for the breach of
his duty of care or fiduciary duty to the extent he acted in good faith and had
a reasonable basis to believe that the act would not prejudice the company as
well as for monetary liabilities charged against him as a result of an act or
omission he committed in connection with his serving as an officer or director
of the company; and (ii) the company may indemnify an officer or director in
connection with his service as officer or director, for monetary liability
incurred pursuant to a judgment including a settlement or arbitration decision
approved by a court, in an action brought against him by a third party as well
as for reasonably legal expenses incurred in an action brought against him by or
on behalf of the company or others, or as a result of a criminal charge of which
he was acquitted.

         (1) Article 108 of the Registrant's Amended Articles of Association
provides:

         Subject to the provisions of the Companies Ordinance, the Company may:

         (a) enter into a contract for the insurance of the liability, in whole
or in part, of any of its officers with respect to any of the following:

                  1. a breach of duty of care to the Company or to any other
         person;

                  2. a breach of fiduciary duty to the Company, provided that
         the officer has acted in good faith and had reasonable grounds to
         assume that the act would not harm the good of the Company;

                  3. a financial liability which shall be imposed on such
         officer in favor of any other person, in respect of an act performed by
         him by virtue of his being an Officer of the Company;

         (b) indemnify an officer of the Company with respect to any of the
following;

                  1. a financial liability imposed on him in favor of any other
         person by any judgment, including a judgment given as a result of a
         settlement or an arbitrator's award which has been confirmed by a
         court, in respect of an act performed by him by virtue of his being an
         officer of the Company;

                  2. reasonable litigation expenses, including lawyer's fees and
         expenses, expended by an officer or which were imposed on an officer by
         a court in proceedings filed against him by the Company or in its name,
         or by any other person, or in a criminal charge on which he


                                        5
<PAGE>   6
         was acquitted, in respect of an act performed by him by virtue of his
         being an officer of the
         Company.

         These provisions are specifically limited in their scope by the
Companies Ordinance, which provides that a company may not indemnify an officer
or director nor enter into an insurance contract which would provide coverage
for any monetary liability incurred as a result of the following: (a) a breach
by the director or officer of his fiduciary duty unless he acted in good faith
and had a reasonable basis to believe that the act would not prejudice the
company; (b) a breach by the director or officer of his duty of care if such
breach was done intentionally or in disregard of the circumstances of the breach
or its consequences; (c) any act or omission done with the intent to derive an
illegal personal benefit; or (d) any fine levied against the director or officer
as a result of a criminal offense.

         (2) Under his employment agreement with the Company, Mr. Eldad Weiss is
entitled to reimbursement for all legal expenses relating to the lawsuit filed
by Mr. Eitan Zucker against the Company and Mr. Weiss, up to a maximum of
$50,000. The Company has also agreed to consult with and receive the permission
of Mr. Weiss prior to making any strategic decision in the defense strategy,
change in legal representation and/or any settlement and/or appeal of the
lawsuit.

ITEM     7.       EXEMPTION FROM REGISTRATION CLAIMED.

         Not applicable.

ITEM     8.       EXHIBITS.

         4.1      Key Employee Plan (incorporated by reference to exhibit number
                  10.4 to the Company's Registration Statement on Form F-1, as
                  amended, File No. 333-7926)

         4.2      May 1994 Stock Option Plan (incorporated by reference to
                  exhibit number 10.5 to the Company's Registration Statement on
                  Form F-1, as amended, File No. 333-7926)

         4.3      1994 General Stock Option Plan (incorporated by reference to
                  exhibit number 10.6 to the Company's Registration Statement on
                  Form F-1, as amended, File No. 333- 7926)

         4.4      1997 Stock Option Plan for Qualifying Israel Employees
                  (incorporated by reference to exhibit 10.8 to the Company's
                  Registration Statement on Form F-1, as amended, File No.
                  333-7926)

         4.5      1997 Executive Stock Option Plan (incorporated by reference to
                  exhibit number 10.7 to the Company's Registration Statement on
                  Form F-1, as amended, File No. 333- 7926)


                                        6
<PAGE>   7
         4.6      1997 Stock Option Plan for U.S. Employees (incorporated by
                  reference to exhibit number 10.9 to the Company's Registration
                  Statement on Form F-1, as amended, File No. 333-7926)

         5        Opinion of Efrati Galili & Co.

         23.1     Consent of Kost Levary & Forer

         23.2     Consent of Ernst & Young LLP

         23.3     Consent of Blick Rothenberg

         23.4     Consent of Efrati Galili & Co. (contained in their opinion
                  constituting Exhibit 5).

         24       Power of Attorney (included in signature page).

ITEM 9.           UNDERTAKINGS.

         (a)      The undersigned registrant hereby undertakes:

                  (1)      To file, during any period in which offers or sales
                           are being made, a post-effective amendment to this
                           registration statement:

                           (i)      To include any prospectus required by
                                    Section 10(a)(3) of the Securities Act of
                                    1933;

                           (ii)     To reflect in the prospectus any facts or
                                    events arising after the effective date of
                                    the registration statement (or the most
                                    recent post- effective amendment thereof)
                                    which, individually or in the aggregate,
                                    represent a fundamental change in the
                                    information set forth in the registration
                                    statement. Notwithstanding the foregoing,
                                    any increase or decrease in volume of
                                    securities offered (if the total dollar
                                    value of securities offered would not exceed
                                    that which was registered) and any deviation
                                    from the low or high end of the estimated
                                    maximum offering range may be reflected in
                                    the form of prospectus filed with the
                                    Commission pursuant to Rule 424(b) if, in
                                    the aggregate, the changes in volume and
                                    price represent no more than a 20 percent
                                    change in the maximum aggregate offering
                                    price set forth in the "Calculation of
                                    Registration Fee" table in the effective
                                    registration statement;


                                        7
<PAGE>   8
                           (iii)    To include any material information with
                                    respect to the Plan of Distribution not
                                    previously disclosed in the registration
                                    statement or any material change to such
                                    information in the registration statement;

                  (2)      That, for the purpose of determining any liability
                           under the Securities Act of 1933, each such
                           post-effective amendment shall be deemed to be a new
                           registration statement relating to the securities
                           offered therein, and the offering of such securities
                           at that time shall be deemed to be the initial bona
                           fide offering thereof.

                  (3)      To remove from registration by means of a
                           post-effective amendment any of the securities being
                           registered which remain unsold at the termination of
                           the offering.

         (b)      The undersigned registrant hereby undertakes that, for
                  purposes of determining any liability under the Securities Act
                  of 1933, each filing of the registrant's annual report
                  pursuant to Section 13(a) or Section 15(d) of the Securities
                  Exchange Act of 1934 (and, where applicable, each filing of an
                  employee benefit plan's annual report pursuant to Section
                  15(d) of the Securities Exchange Act of 1934) that is
                  incorporated by reference in the registration statement shall
                  be deemed to be a new registration statement relating to the
                  securities offered therein, and the offering of such
                  securities at that time shall be deemed to be the initial bona
                  fide offering thereof.

         (c)      Insofar as indemnification for liabilities arising under the
                  Securities Act of 1933 may be permitted to directors, officers
                  and controlling persons of the registrant pursuant to the
                  foregoing provisions, or otherwise, the registrant has been
                  advised that in the opinion of the Securities and Exchange
                  Commission such indemnification is against public policy as
                  expressed in the Securities Act of 1933 and is, therefore,
                  unenforceable. In the event that a claim for indemnification
                  against such liabilities (other than the payment by the
                  registrant of expenses incurred or paid by a director, officer
                  or controlling person of the registrant in the successful
                  defense of any action, suit or proceeding) is asserted by such
                  director, officer, or controlling person of the registrant in
                  connection with the securities being registered, the
                  registrant will, unless in the opinion of its counsel the
                  matter has been settled by controlling precedent, submit to a
                  court of appropriate jurisdiction the question whether such
                  indemnification by it is against public policy as expressed in
                  the Securities Act of 1933 and will be governed by the final
                  adjudication of such issue.


                                        8
<PAGE>   9
                                   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Herzlia, Israel on the 30 day of December, 1998.

                                       PARADIGM GEOPHYSICAL LTD.

                                       By: /s/Eldad Weiss
                                           Eldad Weiss
                                           President and Chief Executive Officer


                                        9
<PAGE>   10
                                POWER OF ATTORNEY

         KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Eldad Weiss and Brian W. Berman, or
either of them, as his true and lawful attorneys-in-fact and agents, with full
power of substitution and, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and any registration
statement relating to the offering hereunder pursuant to Rule 462 under the
Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or either of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

         Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:

<TABLE>
<CAPTION>
         Signature                              Title                                Date
         ---------                              -----                                ----
<S>                               <C>                                         <C>
/s/Jacob Dunietz                  Chairman of the Board                       December 30, 1998
--------------------------
Jacob Dunietz

/s/Eldad Weiss                    President, Chief Executive Officer          December 30, 1998
--------------------------        and Director                 
Eldad Weiss                       (Principal Executive Officer)
                                  

/s/Brian W. Berman                Chief Financial Officer                     December 30, 1998
--------------------------        (Principal Financial and Accounting 
Brian W. Berman                   Officer)                            
                                  

/s/Ofer Nemirovsky                Director                                    December 30, 1998
--------------------------
Ofer Nemirovsky

/s/Samuel H. Schwartz             Director                                    December 30, 1998
--------------------------
Samuel H. Schwartz

/s/ Erel Margalit                 Director                                    December 30, 1998
--------------------------
Erel Margalit

/s/Elie Barr                      Director                                    December 30, 1998
--------------------------
Elie Barr

/s/Amos Nur                       Director                                    December 30, 1998
--------------------------
Amos Nur

AUTHORIZED REPRESENTATIVE IN THE UNITED STATES:
PARADIGM GEOPHYSICAL CORP.
By:   /s/Eldad Weiss
      --------------------------
Name:  Eldad Weiss
Title: Chief Executive Officer
</TABLE>


                                       10
<PAGE>   11
INDEX TO EXHIBITS


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

         4.1      Key Employee Plan (incorporated by reference to exhibit number
                  10.4 to the Company's Registration Statement on Form F-1, as
                  amended, File No. 333- 7926.)

         4.2      May 1994 Stock Option Plan (incorporated by reference to
                  exhibit number 10.5 to the Company's Registration Statement on
                  Form F-1, as amended, File No. 333-7926.)

         4.3      1994 General Stock Option Plan (incorporated by reference to
                  exhibit number 10.6 to the Company's Registration Statement on
                  Form F-1, as amended, File No. 333-7926.)

         4.4      1997 Stock Option Plan for Qualifying Israel Employees
                  (incorporated by reference exhibit number 10.8 to the
                  Company's Registration Statement on Form F-1, as amended, File
                  No. 333-7926.)

         4.5      1997 Executive Stock Option Plan (incorporated by reference to
                  exhibit number 10.7 to the Company's Registration Statement on
                  Form F-1, as amended, File No. 333-7926.)

         4.6      1997 Stock Option Plan for U.S. Employees (incorporated by
                  reference to exhibit number 10.9 to the Company's Registration
                  Statement on Form F-1, as amended, File No. 333-7926.)

         5        Opinion of Efrati Galili & Co.

         23.1     Consent of Kost Levary & Forer

         23.2     Consent of Ernst & Young LLP

         23.3     Consent of Blick Rothenberg

         23.4     Consent of Efrati Galili & Co. (contained in their opinion
                  constituting Exhibit 5).

         24       Power of Attorney (included in signature page).


                                       11
[{"type": "S-8", "sequence": "1", "description": "PARADIGM GEOPHYSICAL LTD.", "secsgml_size_bytes": 30008}]
{"company-data": {"conformed-name": "PARADIGM GEOPHYSICAL LTD", "cik": "0000931131", "assigned-sic": "7372", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-70047", "film-number": "98779840"}, "business-address": {"street1": "MERKAZIM HOUSE 32 MASKIT ST", "street2": "P O BOX 2061", "city": "HERZLIA B", "state": "L3", "zip": "46120", "phone": "2818763473"}, "mail-address": {"street1": "4 GREENSPOINT PLAZA 16945 NORTHCHASE", "street2": "DRIVE SUITE 1400", "city": "HOUSTON", "state": "TX", "zip": "77060"}}
1
  As filed with the Securities and Exchange Commission on December 31, 1998
                                                     Registration No. 333-______

                      =====================================

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

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

                                    FORM S-8
             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

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

                            PARADIGM GEOPHYSICAL LTD.
             (Exact name of registrant as specified in its charter)
ISRAEL                                                        NOT APPLICABLE
(State or other jurisdiction of incorporation                 (I.R.S. Employer Identification Number)
or organization)
MERKAZIM HOUSE
                                32 MASKIT STREET
                                   P.O.B. 2061
                                HERZLIA B, ISRAEL
                                 972-9-970-9300

   (Address, including zip code, of registrant's principal executive offices)

                                KEY EMPLOYEE PLAN
                           MAY 1994 STOCK OPTION PLAN
                         1994 GENERAL STOCK OPTION PLAN
             1997 STOCK OPTION PLAN FOR QUALIFYING ISRAEL EMPLOYEES
                        1997 EXECUTIVE STOCK OPTION PLAN
                    1997 STOCK OPTION PLAN FOR U.S. EMPLOYEES

                           (FULL TITLES OF THE PLANS)

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

                           PARADIGM GEOPHYSICAL CORP.
                                 2401 PORTSMOUTH
                              HOUSTON, TEXAS 77098
                                  713-630-3800

            (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)

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

      Copies of all communications, including all communications sent to the
agent for service, should be sent to:

ANDREW C. FREEDMAN, ESQ. AND                       DAVID EFRATI, ADV. AND
  RICHARD H. GILDEN, ESQ.                            IAN ROSTOWSKY, ADV.
FULBRIGHT & JAWORSKI L.L.P.                          EFRATI GALILI & CO.
      666 FIFTH AVENUE                               6 WISSOTSKY STREET
  NEW YORK, NEW YORK 10103                         TEL AVIV, ISRAEL 62338
       (212) 318-3000                                011-972-3-605-1010
 FACSIMILE: (212) 752-5958                      FACSIMILE: 011-972-3-604-0111

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

                      =====================================
2
                         CALCULATION OF REGISTRATION FEE
PROPOSED
                                                                                              MAXIMUM          AMOUNT OF
                                               AMOUNT TO BE       PROPOSED MAXIMUM           AGGREGATE        REGISTRATION
    TITLE OF SECURITIES TO BE REGISTERED      REGISTERED (1)  OFFERING PRICE PER SHARE    OFFERING PRICE          FEE
    ------------------------------------      --------------  ------------------------    --------------      ------------
ORDINARY SHARES, NIS 0.5 PAR VALUE PER                                                                                  
SHARE REPRESENTED BY OPTIONS GRANTED              63,336
PURSUANT TO THE KEY EMPLOYEE PLAN ..........      SHARES              $0.59(2)               $37,368             $10.39

ORDINARY SHARES, NIS 0.5 PAR VALUE PER                                                                                  
SHARE, REPRESENTED BY OPTIONS GRANTED
PURSUANT TO THE MAY 1994 STOCK OPTION            114,678
PLAN........................................      SHARES              $2.50(3)               $286,695            $79.62

ORDINARY SHARES, NIS 0.5 PAR VALUE PER                                                                                  
SHARE, REPRESENTED BY OPTIONS GRANTED
PURSUANT TO THE MAY 1994 STOCK OPTION            111,506
PLAN........................................      SHARES              $4.00(3)               $446,024            $124.00

ORDINARY SHARES, NIS 0.5 PAR VALUE PER                                                                                  
SHARE, REPRESENTED BY OPTIONS GRANTED
PURSUANT TO THE 1994 GENERAL STOCK OPTION         60,176
PLAN........................................      SHARES              $7.00(4)               $421,232            $117.10

ORDINARY SHARES, NIS 0.5 PAR VALUE PER                                                                                  
SHARE, REPRESENTED BY OPTIONS GRANTED
PURSUANT TO THE 1997 STOCK OPTION PLAN FOR       558,486
QUALIFIYING ISRAEL EMPLOYEES................      SHARES              $7.00(5)               $3,909,402          $1,086.81

ORDINARY SHARES, NIS 0.5 PAR VALUE PER                                                                                  
SHARE, REPRESENTED BY OPTIONS GRANTED
PURSUANT TO THE 1997 EXECUTIVE STOCK             418,934
OPTION PLAN.................................      SHARES              $7.00(6)               $2,932,538          $815.25

ORDINARY SHARES, NIS 0.5 PAR VALUE PER                                                                                  
SHARE, REPRESENTED BY OPTIONS GRANTED
PURSUANT TO THE 1997 EXECUTIVE STOCK
OPTION PLAN.................................      30,000              $9.00(6)               $270,000            $75.06

ORDINARY SHARES, NIS 0.5 PAR VALUE PER                                                                                  
SHARE, REPRESENTED BY OPTIONS GRANTED
PURSUANT TO THE 1997 STOCK OPTION PLAN FOR       235,500
U.S. EMPLOYEES..............................      SHARES              $7.00(7)               $1,648,500          $458.28

ORDINARY SHARES, NIS 0.5 PAR VALUE PER                                                                                  
SHARE, REPRESENTED BY OPTIONS RESERVED FOR
ISSUANCE UNDER THE 1997 STOCK OPTION PLAN
FOR QUALIFYING ISRAEL EMPLOYEES, THE 1997
EXECUTIVE STOCK OPTION PLAN, AND THE 1997        707,384
STOCK OPTION PLAN FOR U.S. EMPLOYEES........      SHARES             $4.625(8)               $3,271,651.00       $909.52

TOTAL MAXIMUM OFFERING AND                      2,300,000               N/A                  $13,223,410.00      $3,676.11
REGISTRATION FEE............................      SHARES
(1)      An additional indeterminable number of shares are also being registered
         to cover any adjustments required by anti-dilution provisions in the
         number of shares issuable upon the exercise of options granted under
         the Key Employee Plan, the May 1994 Stock Option Plan, the 1994 General
         Stock Option Plan, the 1997 Stock Option Plan for Qualifying Israel
         Employees, the 1997 Executive Stock Option Plan and the 1997 Stock
         Option Plan for U.S. Employees.

(2)      Represents the price at which options may be exercised under the Key
         Employee Plan.

(3)      Represents the price at which certain options may be exercised under
         the May 1994 Stock Option Plan.

(4)      Represents the price at which options may be exercised under the 1994
         General Stock Option Plan.

(5)      Represents the price at which options may be exercised under the 1997
         Stock Option Plan for Qualifying Israel Employees.

(6)      Represents the price at which options may be exercised under the 1997
         Executive Stock Option Plan.

(7)      Represents the price at which options may be exercised under the 1997
         Stock Option Plan for U.S. Employees.

(8)      The price is estimated in accordance with Rule 457(h)(1) under the
         Securities Act of 1933, as amended, solely for the purpose of
         calculating the registration fee and is the average of the high and low
         prices of Paradigm Geophysical Ltd. Ordinary Shares as reported on the
         Nasdaq National Market on December 25, 1998.

                                        2
3
                                     PART I

         The document(s) containing the information called for in Part I of Form
S-8 will be sent or given to employees awarded options under the Key Employee
Plan, the May 1994 Stock Option Plan, the 1994 General Stock Option Plan, the
1997 Stock Option Plan for Qualifying Israel Employees, the 1997 Executive Stock
Option Plan, and the 1997 Stock Option Plan for U.S. Employees (collectively
referred to as the "Plans"), adopted by Paradigm Geophysical Ltd. (the "Company"
or the "Registrant") and are not being filed with or included in this Form S-8
in accordance with the rules and regulations of the Securities and Exchange
Commission (the "Commission").

                                        3
4
                                     PART II

ITEM 3.           INCORPORATION OF DOCUMENTS BY REFERENCE.

         The following documents filed by the Company with the Commission are
incorporated herein by reference:

         (i)      The Company's prospectus dated June 10, 1998, as filed with
                  the Commission pursuant to Rule 424(b) under the Securities
                  Act of 1933.

         (ii)     The description of the Company's Ordinary Shares contained in
                  its Registration Statement on Form 8-A (File No. 0-29538) as
                  filed with the Commission pursuant to the Securities Exchange
                  Act of 1934, as amended, on November 24, 1997 and as may be
                  further amended, modified or superseded by any report or
                  amendment filed with the Commission for the purpose of
                  updating such description.

         (iii)    The Company's Report of Foreign Private Issuers on Form 6-K
                  dated August 3, 1998 and October 28, 1998 and each Form 6-K
                  subsequently submitted to the Commission, in which the Company
                  specifically indicates that such Form 6-K is incorporated by
                  reference into this Form.

         In addition to the foregoing, all other documents subsequently filed by
the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended, prior to the filing of a post-effective
amendment indicating that all of the securities offered hereunder have been sold
or deregistering all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated by reference in this Registration Statement shall be deemed to be
modified or superseded for purposes of this Registration Statement to the extent
that a statement contained herein or in any subsequently filed document that is
also incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.

ITEM     4.       DESCRIPTION OF SECURITIES.

         Not applicable.

ITEM 5.           INTERESTS OF NAMED EXPERTS AND COUNSEL.

         The validity of the shares being offered hereby and certain other legal
matters in connection with the offering of such securities will be passed upon
for the Company by Efrati Galili & Co., Tel Aviv, Israel, Israeli counsel to the
Company.

                                        4
5
ITEM 6.           INDEMNIFICATION OF DIRECTORS AND OFFICERS.

         Section 96 of the Companies Ordinance (New Version),1983, as amended
(the "Companies Ordinance") permits a company's Articles of Association to
provide that (i) the company may insure a director or officer for the breach of
his duty of care or fiduciary duty to the extent he acted in good faith and had
a reasonable basis to believe that the act would not prejudice the company as
well as for monetary liabilities charged against him as a result of an act or
omission he committed in connection with his serving as an officer or director
of the company; and (ii) the company may indemnify an officer or director in
connection with his service as officer or director, for monetary liability
incurred pursuant to a judgment including a settlement or arbitration decision
approved by a court, in an action brought against him by a third party as well
as for reasonably legal expenses incurred in an action brought against him by or
on behalf of the company or others, or as a result of a criminal charge of which
he was acquitted.

         (1) Article 108 of the Registrant's Amended Articles of Association
provides:

         Subject to the provisions of the Companies Ordinance, the Company may:

         (a) enter into a contract for the insurance of the liability, in whole
or in part, of any of its officers with respect to any of the following:

                  1. a breach of duty of care to the Company or to any other
         person;

                  2. a breach of fiduciary duty to the Company, provided that
         the officer has acted in good faith and had reasonable grounds to
         assume that the act would not harm the good of the Company;

                  3. a financial liability which shall be imposed on such
         officer in favor of any other person, in respect of an act performed by
         him by virtue of his being an Officer of the Company;

         (b) indemnify an officer of the Company with respect to any of the
following;

                  1. a financial liability imposed on him in favor of any other
         person by any judgment, including a judgment given as a result of a
         settlement or an arbitrator's award which has been confirmed by a
         court, in respect of an act performed by him by virtue of his being an
         officer of the Company;

                  2. reasonable litigation expenses, including lawyer's fees and
         expenses, expended by an officer or which were imposed on an officer by
         a court in proceedings filed against him by the Company or in its name,
         or by any other person, or in a criminal charge on which he

                                        5
6
         was acquitted, in respect of an act performed by him by virtue of his
         being an officer of the
         Company.

         These provisions are specifically limited in their scope by the
Companies Ordinance, which provides that a company may not indemnify an officer
or director nor enter into an insurance contract which would provide coverage
for any monetary liability incurred as a result of the following: (a) a breach
by the director or officer of his fiduciary duty unless he acted in good faith
and had a reasonable basis to believe that the act would not prejudice the
company; (b) a breach by the director or officer of his duty of care if such
breach was done intentionally or in disregard of the circumstances of the breach
or its consequences; (c) any act or omission done with the intent to derive an
illegal personal benefit; or (d) any fine levied against the director or officer
as a result of a criminal offense.

         (2) Under his employment agreement with the Company, Mr. Eldad Weiss is
entitled to reimbursement for all legal expenses relating to the lawsuit filed
by Mr. Eitan Zucker against the Company and Mr. Weiss, up to a maximum of
$50,000. The Company has also agreed to consult with and receive the permission
of Mr. Weiss prior to making any strategic decision in the defense strategy,
change in legal representation and/or any settlement and/or appeal of the
lawsuit.

ITEM     7.       EXEMPTION FROM REGISTRATION CLAIMED.

         Not applicable.

ITEM     8.       EXHIBITS.

         4.1      Key Employee Plan (incorporated by reference to exhibit number
                  10.4 to the Company's Registration Statement on Form F-1, as
                  amended, File No. 333-7926)

         4.2      May 1994 Stock Option Plan (incorporated by reference to
                  exhibit number 10.5 to the Company's Registration Statement on
                  Form F-1, as amended, File No. 333-7926)

         4.3      1994 General Stock Option Plan (incorporated by reference to
                  exhibit number 10.6 to the Company's Registration Statement on
                  Form F-1, as amended, File No. 333- 7926)

         4.4      1997 Stock Option Plan for Qualifying Israel Employees
                  (incorporated by reference to exhibit 10.8 to the Company's
                  Registration Statement on Form F-1, as amended, File No.
                  333-7926)

         4.5      1997 Executive Stock Option Plan (incorporated by reference to
                  exhibit number 10.7 to the Company's Registration Statement on
                  Form F-1, as amended, File No. 333- 7926)

                                        6
7
         4.6      1997 Stock Option Plan for U.S. Employees (incorporated by
                  reference to exhibit number 10.9 to the Company's Registration
                  Statement on Form F-1, as amended, File No. 333-7926)

         5        Opinion of Efrati Galili & Co.

         23.1     Consent of Kost Levary & Forer

         23.2     Consent of Ernst & Young LLP

         23.3     Consent of Blick Rothenberg

         23.4     Consent of Efrati Galili & Co. (contained in their opinion
                  constituting Exhibit 5).

         24       Power of Attorney (included in signature page).

ITEM 9.           UNDERTAKINGS.

         (a)      The undersigned registrant hereby undertakes:

                  (1)      To file, during any period in which offers or sales
                           are being made, a post-effective amendment to this
                           registration statement:

                           (i)      To include any prospectus required by
                                    Section 10(a)(3) of the Securities Act of
                                    1933;

                           (ii)     To reflect in the prospectus any facts or
                                    events arising after the effective date of
                                    the registration statement (or the most
                                    recent post- effective amendment thereof)
                                    which, individually or in the aggregate,
                                    represent a fundamental change in the
                                    information set forth in the registration
                                    statement. Notwithstanding the foregoing,
                                    any increase or decrease in volume of
                                    securities offered (if the total dollar
                                    value of securities offered would not exceed
                                    that which was registered) and any deviation
                                    from the low or high end of the estimated
                                    maximum offering range may be reflected in
                                    the form of prospectus filed with the
                                    Commission pursuant to Rule 424(b) if, in
                                    the aggregate, the changes in volume and
                                    price represent no more than a 20 percent
                                    change in the maximum aggregate offering
                                    price set forth in the "Calculation of
                                    Registration Fee" table in the effective
                                    registration statement;

                                        7
8
                           (iii)    To include any material information with
                                    respect to the Plan of Distribution not
                                    previously disclosed in the registration
                                    statement or any material change to such
                                    information in the registration statement;

                  (2)      That, for the purpose of determining any liability
                           under the Securities Act of 1933, each such
                           post-effective amendment shall be deemed to be a new
                           registration statement relating to the securities
                           offered therein, and the offering of such securities
                           at that time shall be deemed to be the initial bona
                           fide offering thereof.

                  (3)      To remove from registration by means of a
                           post-effective amendment any of the securities being
                           registered which remain unsold at the termination of
                           the offering.

         (b)      The undersigned registrant hereby undertakes that, for
                  purposes of determining any liability under the Securities Act
                  of 1933, each filing of the registrant's annual report
                  pursuant to Section 13(a) or Section 15(d) of the Securities
                  Exchange Act of 1934 (and, where applicable, each filing of an
                  employee benefit plan's annual report pursuant to Section
                  15(d) of the Securities Exchange Act of 1934) that is
                  incorporated by reference in the registration statement shall
                  be deemed to be a new registration statement relating to the
                  securities offered therein, and the offering of such
                  securities at that time shall be deemed to be the initial bona
                  fide offering thereof.

         (c)      Insofar as indemnification for liabilities arising under the
                  Securities Act of 1933 may be permitted to directors, officers
                  and controlling persons of the registrant pursuant to the
                  foregoing provisions, or otherwise, the registrant has been
                  advised that in the opinion of the Securities and Exchange
                  Commission such indemnification is against public policy as
                  expressed in the Securities Act of 1933 and is, therefore,
                  unenforceable. In the event that a claim for indemnification
                  against such liabilities (other than the payment by the
                  registrant of expenses incurred or paid by a director, officer
                  or controlling person of the registrant in the successful
                  defense of any action, suit or proceeding) is asserted by such
                  director, officer, or controlling person of the registrant in
                  connection with the securities being registered, the
                  registrant will, unless in the opinion of its counsel the
                  matter has been settled by controlling precedent, submit to a
                  court of appropriate jurisdiction the question whether such
                  indemnification by it is against public policy as expressed in
                  the Securities Act of 1933 and will be governed by the final
                  adjudication of such issue.

                                        8
9
                                   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Herzlia, Israel on the 30 day of December, 1998.

                                       PARADIGM GEOPHYSICAL LTD.

                                       By: /s/Eldad Weiss
                                           Eldad Weiss
                                           President and Chief Executive Officer

                                        9
10
                                POWER OF ATTORNEY

         KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Eldad Weiss and Brian W. Berman, or
either of them, as his true and lawful attorneys-in-fact and agents, with full
power of substitution and, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and any registration
statement relating to the offering hereunder pursuant to Rule 462 under the
Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or either of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

         Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature                              Title                                Date
         ---------                              -----                                ----
/s/Jacob Dunietz                  Chairman of the Board                       December 30, 1998
--------------------------
Jacob Dunietz

/s/Eldad Weiss                    President, Chief Executive Officer          December 30, 1998
--------------------------        and Director                 
Eldad Weiss                       (Principal Executive Officer)
                                  

/s/Brian W. Berman                Chief Financial Officer                     December 30, 1998
--------------------------        (Principal Financial and Accounting 
Brian W. Berman                   Officer)                            
                                  

/s/Ofer Nemirovsky                Director                                    December 30, 1998
--------------------------
Ofer Nemirovsky

/s/Samuel H. Schwartz             Director                                    December 30, 1998
--------------------------
Samuel H. Schwartz

/s/ Erel Margalit                 Director                                    December 30, 1998
--------------------------
Erel Margalit

/s/Elie Barr                      Director                                    December 30, 1998
--------------------------
Elie Barr

/s/Amos Nur                       Director                                    December 30, 1998
--------------------------
Amos Nur

AUTHORIZED REPRESENTATIVE IN THE UNITED STATES:
PARADIGM GEOPHYSICAL CORP.
By:   /s/Eldad Weiss
      --------------------------
Name:  Eldad Weiss
Title: Chief Executive Officer
10
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INDEX TO EXHIBITS

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

         4.1      Key Employee Plan (incorporated by reference to exhibit number
                  10.4 to the Company's Registration Statement on Form F-1, as
                  amended, File No. 333- 7926.)

         4.2      May 1994 Stock Option Plan (incorporated by reference to
                  exhibit number 10.5 to the Company's Registration Statement on
                  Form F-1, as amended, File No. 333-7926.)

         4.3      1994 General Stock Option Plan (incorporated by reference to
                  exhibit number 10.6 to the Company's Registration Statement on
                  Form F-1, as amended, File No. 333-7926.)

         4.4      1997 Stock Option Plan for Qualifying Israel Employees
                  (incorporated by reference exhibit number 10.8 to the
                  Company's Registration Statement on Form F-1, as amended, File
                  No. 333-7926.)

         4.5      1997 Executive Stock Option Plan (incorporated by reference to
                  exhibit number 10.7 to the Company's Registration Statement on
                  Form F-1, as amended, File No. 333-7926.)

         4.6      1997 Stock Option Plan for U.S. Employees (incorporated by
                  reference to exhibit number 10.9 to the Company's Registration
                  Statement on Form F-1, as amended, File No. 333-7926.)

         5        Opinion of Efrati Galili & Co.

         23.1     Consent of Kost Levary & Forer

         23.2     Consent of Ernst & Young LLP

         23.3     Consent of Blick Rothenberg

         23.4     Consent of Efrati Galili & Co. (contained in their opinion
                  constituting Exhibit 5).

         24       Power of Attorney (included in signature page).

                                       11