The Israeli army says troops who wounded an unarmed Israeli protesting against the West Bank security barrier did not break rules about opening fire.
The barrier has come under fire from within Israel
Human rights groups complain that few soldiers are charged in cases where civilians are killed or injured.
In a statement, the army says that although the incident had serious consequences, the soldiers acted according to regulations.
The case caused great controversy because an Israeli was wounded.
It has also raised new questions about army investigations into incidents where Palestinian civilians are casualties.
The incident happened 10 days ago when a group of peace protesters tried to cut through a fenced portion of the barrier.
An Israeli demonstrator was wounded in the legs and another, an American, was lightly wounded.
This appears to be the first incident in which troops opened fire on Jewish protesters.
The army said in a statement that while the incident was "serious" no disciplinary measures would be taken against the troops.
"Given all the factors involved, including the fact that the soldiers felt they were under a real threat, the lack of accessible riot control gear and the rules of engagement the force was operating under, there was no deviation from the normal rules of engagement," it said.
However, the army said it would re-assess rules for dealing with protesters near the barrier, and in particular those regarding the use of live ammunition.
'More inquiries needed'
Critics say the Israelis regularly use live ammunition to disperse Palestinians.
The Palestinian Red Crescent says that more than 2,500 Palestinians have been killed since the intifada - or uprising - began in September 2000. The majority were non-combatants.
More than 900 Israelis have been killed in the same period.
The Israeli human rights group B'Tselem wants each incident involving civilians to be investigated.
Since the start of the intifada, the Israeli military police have only opened 72 inquiries, and there have only been 13 prosecutions. B'Tselem says that has led to what it calls a "trigger-happy attitude".
However, a soldier was arrested last week in connection with the shooting of British peace activist Thomas Hurndall in April.
Mr Hurndall, 22, received head injuries which left him in a permanent vegetative state.