Local people claimed that a large number of troops had run amok, raiding bars and assaulting customers, after one of their colleagues lost his legs in an IRA bomb attack.
The Northern Ireland Director of Public Prosecutions is believed to be nearing a decision after studying Royal Ulster Constabulary reports into the incident.
Although neither the DPP nor the Army would confirm that prosecutions will be brought, other security sources have indicated that soldiers can expect to face charges. Soldiers may also face internal military discipline.
The Coalisland disturbances involved members of 3rd Battalion, the Parachute Regiment. Residents claimed the town had been sealed off while local youths and men were assaulted in what appeared to be revenge attacks.
After the incident a junior officer was suspended from duty and up to 20 soldiers were questioned by police. The trouble escalated shortly afterwards when three civilians were shot and injured by members of another regiment during clashes in which the Army lost a machine-gun. This incident is also under RUC investigation.
Some days later the brigadier in charge of the region was moved to other duties, amid complaints from the Irish Republic's government and other sources.
It has also emerged that two extra battalions of troops sent in earlier this year are to remain in Northern Ireland. The feeling is that the terrorist threat remains high, particularly from the IRA.
On Sunday night, a north Belfast man had a miraculous escape from the IRA when he was shot in the head and left for dead. The IRA named him, alleging that he was an informer, and announced he had been 'executed'. But the man was rushed to hospital where a bullet was removed from his head. His survival raises the possibility that he may be able to identify his IRA interrogators.
The 'Red Branch Knights', a previously unheard-of loyalist group, has said it was responsible for several violent incidents, including recent attempts to bomb a shopping centre and a bank.