The outlawed West Papuan Morning Star flag has become the focus of a new Indonesian investigation involving the wounding of Indigenous students.

The second criminal investigation over attacks on Papuan people within the past month comes on the back of Jakarta authorities receiving video footage, which was obtained by a prominent human rights advocacy group on the scene of an alarming shooting incident.

The footage showed West Papuan youths throwing stones at an Indonesian security infrastructure in the country's occupied territory before the sound of gunshots rang out.

Indonesian authorities insist investigations are underway into the incident in the Mamberamo Tengah Regency of Papua's central highlands where high school students were allegedly seriously injured after police fired shots during a morning graduation event.

Reports from West Papua say seven people were hurt and had to be treated when tensions flared at a parade for school graduates through the town of Kobakma last week.

Indonesian police allegedly fired bullets and tear gas, according to witnesses, in an attempt to break up the celebration.

The situation reportedly escalated after many of the community's residents watching the parade objected to attempts by police officers to stop graduates displaying the Morning Star flag. the flag has historically has been a symbol of Papuan resistance in the occupied territory across the past six decades.

But brandishing the flag or painting its colours and symbols on school uniforms with great pride is also a relatively common occurrence across West Papua on graduation day despite the flag being outlawed by Indonesian authorities.

According to the Human Rights Monitor - an international service that documents and monitors violations of international law that affects people's rights, protection and peace - the West Papuans injured from gunshots were aged between 17 and 24 years old, and included non-students.

Human Rights Monitor said Indonesia should conduct a "prompt and impartial" investigation into the incident that is "capable of identifying those responsible and ensuring accountability and reparations for the victims".

Australia West Papua Association spokesperson Joe Collins said the students had scuffled with police, and defended their actions against the occupying forces on West Papuan ancestral lands.

"Again, we have the usual heavy-handed approach to a peaceful celebration by students - all because they were carrying their national flag, a symbol of great importance to West Papuan people," he said.

Indonesian police say their officers in the regency had attempted to persuade students not to display the Morning Star, but their directions were ignored, and that is how the tense situation developed into unrest.

Police claimed that in response to the disobedience of students, the officers dispersed the crowd by using tear gas but gunshots were only fired into the air as warning shots.

According to police, people injured at the scene also included police personnel.

Indonesian security forces, including military, soon after patrolled the area following an outbreak of a melee quickly descended into rioting and looting at the Kobakma's central market.

An Indonesian government spokesperson alleged on Sunday that information it gathered at the scene indicated the parade for the students had been "infiltrated by another group that provoked to create discord related to an unfortunate incident that happened in the area on the previous day".

"Local authorities in close relations with civic groups, including church authorities and traditional leaders, are currently trying to conduct a thorough investigation regarding the incident," the spokesperson said.

The spokesperson added that Indonesian national and local authorities are focusing their efforts to attempt to avoid any further "unfortunate similar incidents" happening in the future.

Indonesia's national commission on human rights is still investigating a more serious incident late last month where the Indonesian military have been accused of attacking a refugee camp and killing 12 people, including a toddler and a pregnant woman in the Puncak Regency in the same Indonesian central province.

Weeks earlier, five additional West Papuans were killed, including a death of a minor, amid what traditional Indigenous custodians of the lands say is an increase in the presence of Indonesian security and military forces on the ground in the territory this year.