GAZA CITY (AFP) - Five Palestinian fighters were killed as Israeli warplanes struck the Gaza Strip late on Saturday, Israels military and Palestinian sources said. Warplanes hit central Gaza to take out a squad of fighters about to fire rockets at Israel, the military said. The strike was one of the most deadly since Israels 22-day war against Gazas Hamas rulers, dubbed Operation Cast Lead, which began at the end of December 2008 and cost the lives of 1,400 Palestinians, most of them civilians, and 13 Israelis, 10 of them soldiers. Witnesses contacted by AFP said armed men preparing an attack on Israel were killed in the raid, while medics gave a death toll of five martyrs. The raid targeted Deir el-Balah in central Gaza, they said. Security services of the Hamas Islamist movement which rules the Gaza Strip confirmed that the five Palestinians, all aged around 20, died in an Israeli air raid and were to be buried on Sunday. The witnesses said the dead fighters, former members of Hamas, Islamic Jihad or the Committees of Popular Resistance, belonged to one of the radical Salafist groups in Gaza that have recently stepped up attacks against Israel. Meanwhile the Human Rights Watch (HRW) said on Sunday the United States should penalise Israel by withholding from its massive annual aid a sum equal to the amount Israel gives in subsidies to West Bank settlements. In a 166-page report, the group called on the international community to penalise Israel for discrimination in the West Bank, comparing the services enjoyed by Jewish settlers with those of neighbouring Palestinian villages. Palestinians face systematic discrimination merely because of their race, ethnicity, and national origin, depriving them of electricity, water, schools, and access to roads, while nearby Jewish settlers enjoy all of these state-provided benefits, HRW representative Carroll Bogert said. While Israeli settlements flourish, Palestinians under Israeli control live in a time warp - not just separate, not just unequal, but sometimes even pushed off their lands and out of their homes. The group called on the international community to avoid complicity in Israeli breaches of international law, including by cutting assistance to the Jewish state. The United States, which provides 2.75 billion dollars in aid to Israel annually, should suspend financing to Israel in an amount equivalent to the costs of Israels spending in support of settlements, which a 2003 study estimated at 1.4 billion dollars, the report said. Similarly, based on numerous reports that US tax-exempt organisations provide substantial contributions to support settlements, the report urges the US to verify that such tax-exemptions are consistent with US obligations to ensure respect for international law, it added. Jewish settlement on occupied Palestinian land is one of the most divisive issues in efforts to forge a peace agreement between the two sides. Around 500,000 Israelis live in more than 130 locations across the West Bank and east Jerusalem - territories occupied by Israel in the 1967 Middle East war but claimed by Palestinians for a future independent state.