The hitmen are dressed in black BDUs (battle dress uniforms} and black tuques. They appear to be Caucasian and of medium atheletic build, although one of them has a mustache. They are perhaps inspired by the LAPD SWAT team the Die Hard movie, who are dressed in similar uniforms.
One of the men carries a Colt pistol, another an MP5K (which is not an in-game weapon, though the MP5A3 is), and the third carries an M16A2 (also not an in-game weapon, while the Colt Model 733 incorrectly titled at the "M4" is) or M60 machine gun.
Just before the drug deal between the two crime families begins, Diaz' Hitmen hide behind a bunch of crates in Phil's Depot, which has been abandoned between 1984 and 1986, and the location where the deal takes place. The deal was a drug deal with Victor trading two suitcases of 100% Pure Gain Colombian Cocaine for two million dollars from the Forelli Family. Just before the deal finishes, the three men come out from their hiding places and open fire on the dealers, killing Harry, Lee, and Victor. Lance fled the scene in his Maverick while Tommy escapes with Ken in his car, leaving both the money and cocaine behind, which is then handed over to Diaz, who uses them for his own gains and leisure. Because of the ambush, this is when the events of Grand Theft Auto: Vice City take place.