The clashes erupted after the soldiers prevented people joining an anti-government demonstration in the mainly Sunni city after Friday prayers.
It is the first such confrontation with the army since huge protests against the government began five weeks ago in Baghdad and western Iraq.
They called for the resignation of Prime Minister Nouri Maliki.
Friday’s violence in Fallujah broke out after army units in the west of the city blocked off protesters who were heading towards the main demonstration.
The protesters retaliated by throwing bottles of water and stones at the troops, who then opened fire.
It was not immediately clear whether the soldiers fired directly into the crowd or into the air, the BBC’s correspondent reports from Baghdad.
The demonstration in Fallujah was one of several held in other parts of the province of Anbar after Friday prayers.
The anti-government protests began in mid-December shortly after the arrest of several bodyguards of the Finance Minister Rafie al-Issawi.
But the campaign against Mr Maliki has since broadened.
The prime minister has urged both the security forces and demonstrators to show restraint, warning of “foreign agendas” seeking to push Iraq towards conflict.
M.D