Belgian police say two pro-Palestinian groups questioned the two Israelis after they alleged that they were waving flags from the Army brigade at the Tomorrowland Music Festival.
Prosecutors said the man was temporarily detained and released after being interviewed.
The Hind Rajab Foundation and Global Legal Action Network said it had filed a complaint after seeing a group of young Israelis flying the purple and white flags of the Givati brigade and claiming they committed war crimes in Gaza.
The Givati flag was one of several Israeli flags that were waved on the set of Israeli DJ duo Vini Vici last Friday.
Prosecutors said no further details about the case would be made public at this stage. The Hindrajab Foundation called the arrest of Israelis a “significant step forward.”
They are not thought to have been prevented from leaving Belgium.
The BBC contacted the Israeli Embassy in Brussels. This declined to comment other than confirming that the two men had been released.
Before detaining the pair, prosecutors said they determined that they could investigate allegations under Belgium’s universal jurisdiction law.
The law was updated last year to allow Belgian police to gather evidence of violations.
In a statement, the European Jewish Association said it was “deeply interested” by the actions of Belgian authorities on the two Israelis.
“These soldiers were carrying out legitimate duties to defend their country, comparable to the duties of soldiers serving in democratic states,” the EJA said.
The Hind Rajab Foundation is chaired by controversial Belgium-Lebanese activist Dyab Abou Jahjah, who admitted he would join the Lebanese group Hezbollah when he was young. Hezbollah’s military terrorist groups are prohibited as EU terrorist groups.
This year’s Tomorrowland Festival went on last week despite the fire destroying the main stage 48 hours before the event began.
Tens of thousands flocked to the booming festival near Antwerp and heard of acts that included David Guetta and lost frequencies.
