Residents said soldiers attacked the riverside Okuoma community of a few hundred people on Sunday while looking for those responsible for Thursday's killings.
Tam Oburumu, who fled from his home, said uniformed men were
going around looking for weapons and ransacked houses before torching them.
"The damage for now is huge, a lot of houses were burned," Oburumu said by phone from a nearby village where he has sought refuge.
Government-owned properties, including a primary school and
hospital, were spared, residents said.
President Bola Tinubu said he had given the military full authority to hunt down those responsible for killing the soldiers, which he described as an "unconscionable crime against the Nigerian people."
But defence chief General Christopher Musa denied that soldiers had attacked the community.
"No reprisals by the army. We are searching for the murderers and their weapon cache," Musa said in a text message to Reuters.
There are frequent, sometimes deadly, clashes over land or over compensation for oil spills by energy companies in many Delta state communities.
Friday Addy, a trader in Okuoma, said she and her mother had left their home when soldiers arrived.
"The people have fled for their lives, and many are missing and we cannot locate them. We are helpless," said Addy.
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