The dead and injured gunmen were members of the radical Islamic group Hamas, which has ruled Gaza since last June.
The air strike came after a rocket fired from the Gaza Strip hit a shopping center in the southern Israeli city of Ashkelon, injuring around 30 people. Four of the injured were subsequently hospitalized with serious injuries.
Several Palestinian resistance groups within Gaza, including the Palestinian Popular Resistance Committees, the leftist Popular Front for the Liberation of Palestine, and the Islamic Jihad movement have claimed responsibility for the attack.
The mall rocket attack came shortly after U.S. President George Bush had arrived in Israel to celebrate the 60th anniversary of the founding of the Jewish state.
The attack has led to growing calls in Israel for a ground offensive in Gaza.
Israel's military intelligence chief, Amos Yadlin, said on Thursday that Palestinian militants were likely to increase the range of their rocket strikes on Israel, telling the Haaretz daily that if Israel does not act, "Hamas will bring more cities within its range of fire."
