Retired colonel Yaura Sasa has been warned by deputy Prime Minister Belden Namah to turn himself in by 4pm today or be arrested.
Namah made the call as Sasa claims to be in charge of the Papua New Guinea Defence Force after placing commander Francis Agwi under house arrest.
He has threatened to use "necessary actions" to resolve the country's political stand-off.
Sasa said soldiers under his control fired several shots this morning as they stormed barracks and took Agwi hostage under house arrest.
Sasa said the action did not amount to a military mutiny or takeover, but said he had been appointed commander by former prime minister Sir Michael Somare.
He called on Sir Michael and prime minister Peter O'Neill to return to parliament to resolve what he called the country's constitutional impasse within seven days.
If that did not happen, he warned he would use "necessary action" to "restore the integrity and respect for the constitution and the judiciary."
"This is not a military takeover," he insisted.
Earlier, at Taurama Barracks, frustrated soldiers surrounded the commanding officer's house and demanded that he vacate the house.