Two people were killed on Tuesday in the southern desert town of Rahat in a shootout apparently sparked by a dispute between rival Bedouin clans over land, Army Radio reported.
Three others were hurt in the clash, two by gunfire and another who was hit in the head by a stone. All three were taken to a Be'er Sheva hospital for treatment.
Police were deployed to the area following the incident in an effort to restore calm.
A Rahat resident who witnessed the fight, Salam al-Wazeid, told Army Radio that soldiers on home leave in the Bedouin city from service in the Israel Defense Forces had used their weapons illegally.
"The problem is that soldiers serving in the IDF come home and use their service-issue weapons in these altercations," Wazeid said.
"There needs to be a clamp-down on the entire Bedouin community to take their weapons away. I blame the Ministry of Defense - I have written letters about this to both the ministry and the State Comptroller."
He added: "More than once my own home has been hit by soldiers' bullets."