In combat the Flare Gun, or signal pistol, was used for indicating position, or at night to lighten the enemy by shooting a round above them. In Hidden & Dangerous 2, however it can be used as a silent pistol. You should not miss with this weapon, because it only has one round and reloading takes very long time. You can only kill your enemy from a short distance, so if your first shot don't take down him, and You don't have any other weapons, Your only choice is to fall back as fast as You can.
Flare Gun on Wikipedia