The victims, Rogers Ssekiwa, 20, and Meddy Male, 28, both residents of Sembabule Town Council, were struck by bullets at around 3am.
They were rushed to Gumaguma Health Facility, where they are currently receiving treatment.
According to Ssekiwa, the shooting followed overnight tensions linked to alleged voter bribery. He accused Bishop Jackson Mulungi, one of the mayoral contenders, of being behind the attack.
The Sembabule Town Council mayoral race has attracted four candidates: Monica Ndibarekera of the NRM, George William Kangave of the NUP, Bishop Jackson Mulungi, an Independent, and Ronald Nsubuga, also an Independent.
Speaking to the press, Kangave alleged that the violence erupted when his supporters attempted to block what they suspected was an operation aimed at bribing voters during the night.
He claimed that armed men opened fire after vehicles believed to be carrying money arrived at the scene.
Residents have condemned the violence, saying the electoral process in Sembabule has become increasingly dangerous, with lives put at risk even during local government elections.
Bishop Jackson Mulungi has dismissed the accusations, describing them as a deliberate attempt to damage his reputation.
Meanwhile, the Masaka Regional Police Spokesperson, Twaha Kasirye, confirmed the shooting and said two suspects have been arrested, adding that investigations are ongoing to apprehend all those involved.
Police say they are committed to restoring calm and ensuring accountability for all acts of election-related violence.