"A failure by governments to demand accountability for serious violations during the Gaza war will also reveal a double-standard in international concern for justice," the New York-based group said.
"Governments that tolerate impunity in the Israeli-Palestinian conflict weaken their calls for accountability in places such as Sri Lanka, Sudan, and the Democratic Republic of Congo," HRW said in the report, entitled "Turning a blind eye."
"Ultimately, if domestic investigations in Israel and Gaza fail, then international prosecutions present the only chance for civilian victims of the armed conflict to obtain justice," it said.
A UN report published in September accused both sides of war crimes during the offensive which Israel launched in a bid to halt rocket attacks by Gaza militants. Some 1,400 Palestinians and 13 Israelis were killed in the conflict.
The UN General Assembly has called on Israel and Palestinian armed groups to conduct impartial investigations.
Israeli military authorities have convicted one soldier for crimes committed in Gaza -- for stealing a credit card from a Palestinian -- HRW said.
The Israeli media said at the start of February that the army has also reprimanded two senior officers for the firing of shells, which contained white phosphorus, in a populated area near a UN compound during the Gaza war.
HRW noted that two more soldiers are on trial for ordering a Palestinian boy to open bags they feared might be rigged with explosives.
Of the roughly 150 incidents the Israeli military said it has investigated, about 120 were limited to "operational debriefings" based on testimony from the soldiers involved but not from witnesses or victims, the rights group said.
Israel has also failed to conduct credible probes of policies that may have led to violations of the laws of war, including targeting police and firing heavy artillery and white phosphorus munitions in populated areas, it said.
In Gaza, Hamas has not punished anyone for the hundreds of "deliberate or indiscriminate rocket attacks into Israeli population centres, which killed three Israeli civilians and wounded dozens more."
"Cases of killings and torture by Hamas security forces against suspected collaborators and political rivals in Gaza have also gone unpunished," the report said.
In January, HRW said that "Hamas’s claim that rockets were intended to hit Israeli military targets and only accidentally harmed civilians is belied by the facts."
Israel, meanwhile, insists its military investigations are up to the highest international standards and says that it found no evidence soldiers deliberately attacked civilians during the Gaza war.
In January, Israel admitted in a report delivered to UN Secretary General Ban Ki-moon that its troops committed several fatal errors in judgment but no violations of international law.
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