Kathleen Thompson was shot dead by British soldiers at her Creggan home in 1972
Kathleen Thompson, 47, was shot dead outside her home in Creggan in November 1971.
On Friday the veteran told the inquest he had returned fire after coming under attack during the search operation.
The witness is not thought to have fired the fatal shots.
When asked why none of his colleagues who have given evidence to the Coroner’s Court recall him firing live rounds, he replied: “I’m at a loss to understand.”
He also told the inquest he accepted that in his statement, he had got “various matters” wrong, including the names of some other soldiers who weren’t in Northern Ireland at the time of Mrs Thompson’s death.
The inquest is being held at the Coroner’s Court in Belfast.
Mrs Thompsons’s family are watching a live stream of the proceedings at The Hive theatre in Creggan, close to where she was killed.
Kathleen Thompson’s body was found by her 12 year-old daughter.
An inquest in 1972 into Mrs Thompson’s death returned an open verdict.
Kathleen Thompson and her family
It began in 2018 but it was adjourned to allow time to trace three soldiers and resumed earlier this month.
During the inquest’s first phase, a former soldier said he had to face the possibility that a bullet from his weapon killed Mrs Thompson.
When the inquest resumed earlier this month, counsel for the coroner said the circumstances of Mrs Thompson’s death were a “cause for concern for her family and the general public”.