A youthful recruit in a Bundeswehr uniform is shown holding a pistol in the mouth of another recruit in an image published on the front page of Bild am Sonntag.
Another photograph shows a soldier pretending to rape another recruit acting as a woman civilian, who is later shown being marched to "execution" by troops. Other pictures show enactments of "civilians" being tortured and hanging from trees, images which revived memories of atrocities by Hitler's armies.
"There will be no toleration whatsoever of such perversion in the Bundeswehr," the Defence Minister, Volker Ruhe, said in an interview with ZDF television. "I will do everything to see that those involved are disciplined and prosecuted. We will ... take action against all those involved, even if they are no longer in the army."
The army said eight recruits on the film, made at Hammelburg training ground, near Wurzburg, in April 1996, were no longer in the army. The Bundeswehr investigation also focused on officers who failed to report the incident which took place during a break in training for soldiers preparing for a mission in former Yugoslavia.
Lieutenant-General Helmut Willmann, the army's officer, said acts by "a handful of mentally disturbed individuals" could not besmirch the force's good name. "I am horrified by what happened at the Hammelburg training ground," he said in a statement released by the defence ministry.
The Greens criticised Gen Willmann for trying to write off the incident as an aberration, as officers knew of the tape for more than a year but said nothing about it. Jurgin Trittin, chairman of the Greens, said the incident was the latest of a series of unsettling incidents. There had been 53 reported incidents of right-wing extremism in the army in 1995.
Wolfgang Schraut, commander of Jaeger Battalion 571, where the incident took place, said the recruits could no longer be punished by the army because they had left. "We will not be able to get our hands on them any more," the officer said. "They were released from the army in an entirely normal fashion after completing their military service."
He said he did not know of the existence of the videotape until Friday and had learned that it was shown "on occasion in small circles among the comrades". Some 3,000 Germans are in the Nato-led Stabilisation Force (SFOR) in Bosnia. Around 4,000 Germans took part in SFOR's predecessor, the peace Implementation Force but were stationed in nearby Croatia.