Ramazan Baran, 24, and Abdulbaki Akdemir, 50, died in hospital after the clashes between soldiers and Kurdish protesters angry at government plans to build military barracks in the Lice district of Kurdish majority Diyarbakir province, medics said.
Three people, including two soldiers, were hospitalised after the demonstrators opened fire, hurled stones and fireworks at security forces, according to an AFP reporter on the scene.
Witnesses told AFP Turkish soldiers also fired live bullets in the clashes.
Tensions have been on the rise in Lice since protesters blocked a road two weeks ago over the construction of new army posts in Kurdish-majority areas, seen as a threat to a peace process launched in 2012 between the government and the outlawed Kurdistan Workers' Party (PKK).
Earlier this week, six soldiers trying to remove protesters blocking the road were wounded after coming under fire from demonstrators.
The Kurdish rebels declared a ceasefire in March last year following secret talks with the country's spy agency. But the process came to a standstill after the PKK announced in September they were suspending their retreat from Turkish soil, accusing the government of failing to deliver on promised reforms.
The PKK, which is blacklisted as a terrorist organisation by Turkey and much of the international community, launched an insurgency seeking self-rule in the southeast in 1984 that has claimed about 45,000 lives.
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