New video evidence showing the fatal shooting of two Palestinian teenagers last week strongly indicates that neither of the boys posed a threat to Israeli forces at the time they were targeted, supporting claims they were "unlawfully killed".

The footage was caught by a CCTV camera installed above a nearby office and shows the deaths of Nadeem Nawara, 17, and Mohammad Salameh, 16, who were both shot through the chest in separate incidents just over an hour apart.

The two boys are seen walking near the building, apparently unarmed, with the second teenager killed while walking away from positions occupied by Israeli security forces outside Ofer prison in the West Bank.

The footage appears to be supported by Palestinian hospital reports seen by the Guardian and witness accounts of the shooting, including that of Mohamed al-Azi, a 15-year-old who survived being shot through the chest.

The composite picture presented by the evidence points to the conclusion that the two teenagers were between 200 and 250 metres from the soldiers who shot them – allegedly with live fire – and were not involved in throwing stones at the time of their deaths. The latter issue is critical because under the Israeli military's Open Fire Regulations, live rounds are only allowed to be used against stone throwers when they pose an imminent danger to life.

In the first incident caught on camera, a figure with a backpack walks across a street towards a group of others standing next to a wall before stumbling and slumping to the ground. An hour and 13 minutes later, another figure crosses the street from the opposite direction and also falls to the ground. Journalists who were at the scene last Thursday confirmed the video showed the fatal shootings.

The Israeli military claimed the footage had been edited in a "biased and tendentious way" and did not show the violence its soldiers encountered.

In the immediate aftermath of the shooting last week Israel's police spokesman and IDF officials insisted preliminary investigations had established that no live fire had taken place and that the boys were killed during a serious riot.

A statement released by the Israeli military on Tuesday largely reiterated that account.

"Security forces in the area used riot dispersal means to restore calm," it said. "Later in the day, it was reported that two Palestinians died as a result of these security operations. A preliminary investigation determined that live fire was not used by security forces. The incident remains under investigation. The video clip which was released today has been edited, and doesn't document the full extent of the event, nor does it reflect the violent nature of the riot."

Speaking to the Guardian after the Israeli military opened a limited new investigation into the shootings, a senior spokesman said: "After the reports that two people had been killed we had senior military on the ground whose preliminary report concluded that there had been no live fire. Clearly – with the new claims – there are questions to be cleared up."

The shootings, during a protest on Nakba Day last week, were already controversial and had been raised by the US secretary of state, John Kerry, in a statement.

The new details contradict the Israeli police and military account that no live rounds were fired during the demonstration and that the killings took place during a riot of some 200 youths who posed a threat to the lives of security forces.

"The images captured on video show unlawful killings where neither child presented a direct and immediate threat to life at the time of their shooting," said Rifat Kassis, executive director of Defence for Children International-Palestine, which distributed the video.

The footage emerged as the human rights group B'Tselem said its own investigation had established that the two boys had been shot without justification, and the soldiers were "in zero danger" at the time.

The footage was recorded on the CCTV of businessman Fakher Zayed, who also witnessed the deaths from the balcony above his office and accused soldiers of shooting to kill.

"I saw about 20 youths burning tyres who then started throwing stones. There were more watching," he told the Guardian. "There were two groups of soldiers that day. There were soldiers under a vine outside a house to the right of the main road. But the boys were safe from them while they were in front of my office, because the soldiers couldn't see them.

"There were other soldiers and vehicles in the parking lot 250 metres away from where the boys were killed, but the boys had pulled back at that point and were no threat to the soldiers.

"I think there were four or five of them in front of my building. I saw the first guy who was killed walking, but he had no stones. He was crossing the road diagonally when he was shot.

"I heard four shots of live fire in total. You can tell by the sound," he said. "In the past, when live fire has been used here they have shot at the legs. This time they were shot in the chest.

"It was maybe an hour and a half later when the second youth was killed. He was walking away from the soldiers when he was shot."

In his hospital bed in Ramallah, after being released from intensive care, Mohammed al-Azi, the third of the teenagers shot that day, said he was unaware of being shot at first. The bullet went through his chest, deflected off his ribs and exited below his shoulder blade.

He admitted he was closer to the soldiers, perhaps 50 metres from them, but insisted he was not throwing stones. He also placed the number present at the shooting closer to 70.

"It was 12 o'clock. I'd gone forward and could see two soldiers under the vine. I heard the shot and heard my friends shout but didn't realise it was me who had been shot at first."

According to B'tselem's investigation the location of the two youths who were killed would have been out of the range of plastic-coated bullets if they had been fired by the soldiers who could see them from the parking lot.

"Even if they could have been hit by a plastic-coated round at that range, it would not penetrate their bodies," the group's Sarit Michaeli said.

Instead, Palestinian hospital reports seen by the Guardian say the bullet that killed Salameh entered through the right side of his back, before shattering his heart and exiting via his sternum.

At the Nuwara family home in Ramallah on Tuesday the teenager's father, Siam, showed reporters the bloodstained backpack he said his son was wearing when he was shot. He also displayed a bullet which he said had been lodged inside it after passing through the boy's chest and back.