Videos of flaming houses along the Forcados river have circulated on social media since Sunday, but AFP has not been able to verify the footage.
Residents in the oil-rich region accused troops of targeting residents of Okuama after the announcement of the soldiers' deaths on Saturday.
The army said the soldiers were killed after being surrounded by local youths on Thursday during a bid to mediate between Okuama, an ethnic Urhobo village, and the neighbouring ethnic Ijaw village of Okoloba.
Late on Monday, defence spokesman Major General Edward Buba dismissed the accusations of reprisals as "fake news".
"The military debunks all claims that the military embarked on reprisal attacks in Okuama Community after the incident. The community was deserted even before troops arrived at the scene," Buba said.
President Bola Ahmed Tinubu said Sunday that he had given the army "full authority to bring to justice anyone found to have been responsible" for killing the soldiers.
"The cowardly offenders responsible for this heinous crime will not go unpunished," he said.
He said a civilian was also killed in the attack, and the army said several people had been arrested.
Nigerian media has reported deadly clashes between the two communities in recent weeks, each claiming ownership of land and fishing rights.
Residents fled Okuama following the attack on Saturday and took refuge in nearby villages.
"As I'm talking to you right now, soldiers are there and they continue the demolition of buildings in the community," a resident from the neighbouring town of Bomadi told AFP on Monday, speaking on condition of anonymity.
Nigeria has previously faced accusations of military reprisals for the killing of troops, including the 2001 Zaki Biam massacre in eastern Benue state and the 1999 Odi massacre, when the army killed hundreds of people in southern Bayelsa state.
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