The incident happened just hours before Australian Prime Minister Kevin Rudd flew into Port Moresby to hold discussions on PNG's widespread law- and-order problems with his counterpart Peter O'Neill.
"This is totally uncalled for and unacceptable behaviour by members of a disciplined organisation," Acting Police Commissioner Simon Kauba said in a statement on Sunday.
He said he had contacted PNG Defence Force officials, and that Military Police and National Capital District police are now investigating the incident.
"I condemn this action in the strongest possible terms and will ensure that it is thoroughly investigated and those responsible will face the full force of the law," Mr Kauba said.
Driving a Toyota flattop, the soldiers broke down the gates of the hospital and began their assault. At least six gun shots were fired during the attack.
The soldiers allege they were attacked by the students during a dispute over the use of an ATM at the hospital on Friday night.
Police were called on Saturday to talk down the soldiers and students after they converged on the hospital grounds.
"We advised the soldiers to lay a formal complaint so that the attackers can be identified and arrested," Mr Kauba said.
Mr Kauba said it was unfortunate when soldiers attack the very people they have sworn to protect and defend.
Mr Rudd touched down in PNG at about 5pm with immigration minister Tony Burke and trade minister Richard Marles, before heading to dinner with Mr O'Neill and Australia's High Commissioner Deborah Stokes.
He is expected to hold talks with PNG government officials on Monday. On the agenda for talks is law an order.
Foreign minister Rimbink Pato told reporters he wanted to discuss a broader role for the Australian Federal Police.
Last month four Chinese nationals were stabbed to death not far from the central business district in Port Moresby. In early June a rogue group of police officers slashed the Achilles tendons of 70 men in a revenge attack over an earlier fight. Mr Rudd told reporters in Cairns on Sunday law and order in PNG concerned him .
"I am going to be talking to (Mr O'Neill) about what we can do to enhance our cooperation there." Australia has already agreed to enhance police training, while Mr O'Neill has entered talks with Queensland for an exchange of 150 police. Bond University criminologist Terry Goldsworthy this week poured cold water on the Queensland plan.
"They have the massive policing task of G20, they've just gotten rid of 25 per cent of the state's most senior officers in the restructure and they're sending officers to PNG," he told Queensland's Courier Mail on Saturday. "I think it's going to be a real challenge.