JERUSALEM/RAMALLAH (Reuters) -Israel's military killed five Palestinian militants in the occupied West Bank on Thursday, hours after a pregnant settler was killed in a shooting, as hardline pro-settler leaders including a government minister called for Palestinian towns to be razed.

The military said in a statement it had killed five "terrorists" and arrested a sixth who had barricaded themselves in a building in Tamoun, following an exchange of gunfire and the use of shoulder-fired missiles by Israeli soldiers.

The military wing of Palestinian militant group Islamic Jihad later issued a statement saying five of its members were killed while clashing with Israeli forces that surrounded their house in the town of Tamoun, north of the West Bank.

Tamoun is a Palestinian town about 35 km (22 miles) from the Israeli settlement of Brukhin, near which the heavily pregnant woman, Tzeela Gez, was killed on Wednesday night in a shooting that drew strong condemnation from Israeli leaders.

The military said it was searching for those responsible for Wednesday's shooting - whom it did not identify - though it was not immediately clear whether the Tamoun operation was linked.

There was no immediate claim of responsibility for the shooting, which occurred amid one of the largest Israeli military operations in the West Bank in two decades and while the Israeli military bombards Gaza.

Gunfire could be heard in Tamoun on Thursday, while Reuters footage showed flames and black smoke on the top floor of a house as Israeli soldiers stood on the street outside. The Palestinian WAFA news agency said the Israeli military was demolishing the house where the Palestinian men had been killed.

The Israeli military said soldiers had identified the "terrorists" in a building during an overnight operation in Tamoun and the nearby city of Tubas. It recovered rifles used by the militants in the building in Tamoun, it said.

The military also said that three armed individuals had been arrested in Tubas.

The Palestinian Health Ministry said the military had taken the bodies of four of the deceased. The local Red Crescent said it had recovered a fifth body from a burning building.

DEMAND FOR RETRIBUTION

Gez, the pregnant woman, was shot near the Brukhin settlement while travelling to hospital with her husband to give birth. She was pronounced dead at the hospital where her baby was delivered by caesarean section, Israeli media reported.

The baby was reportedly in serious but stable condition, while Gez's husband Hananel was lightly injured.

As retribution, Israel's far-right Finance Minister, Bezalel Smotrich, said the nearby Palestinian towns of Bruqin and az-Zawiya should be destroyed, just as cities in Gaza have been.

"Just as we are flattening Rafah, Khan Younis and Gaza (in the Gaza Strip), we must also flatten the terror nests in Judea and Samaria," Smotrich said on social media, employing the term often used in Israel for the West Bank.

Israeli Prime Minister Benjamin Netanyahu said he hoped security forces would quickly find those responsible for Gez's death, while President Isaac Herzog expressed his condolences to her family.

The chief of Israel's general staff, Lieutenant General Eyal Zamir, visited the troops searching for Gez's killer on Thursday near Brukhin.

The Israeli military has killed dozens of Palestinians and destroyed many homes since it launched an operation in January in the West Bank city of Jenin to root out militants.

Those killed have included members of Hamas and other militant groups but also some civilians, including women and children.

(Reporting by Alexander Cornwell, additional reporting by Ali Sawafta and Raneen Sawafta; Editing by Hugh Lawson, Gareth Jones and Rod Nickel)