Warning shots are a waste of ammunition and not a particularly effective deterrent. Instead, modern warfighters inform potentially lost civilians/potential suicide bombers that they're in the soldier's rifle sights by blasting them with laser light from barrel-mounted laser dazzlers like these.
The US military had a rough go manning vehicle checkpoints during the Iraq and Afghanistan conflicts. These locations were prime targets for suicide bombers and routinely targeted by insurgents. If a driver refused to slow down for the checkpoint or appeared to be a threat, soldiers would respond with hand signals, flashing lights, and warning shots. However, on more than one occasion, these initial warnings went unheeded, requiring the use of deadly force — sometimes it was a foiled insurgent, sometimes it was an Italian news crew.
Since audible threats of oncoming violence (read: warning shots) have proven ineffective, the US military has switched over to a visual warning cue: the laser dazzler. Officially called the Ocular Interruption System (OIS), these devices weigh about 4.5kg apiece and are designed to mount onto the Picatinny rail of the M4, M16A4 or M27 Infantry Automatic Rifle. It beams a non-blinding array of lasers out as far as 500 meters to deter incoming threats, getting brighter and more brilliant the closer they get. Though their performance differs among manufacturers and models, most dazzlers operate at the 532nm wavelength to produce a bright green light with outputs ranging from 35 to 200mW.
As the USMC Concepts and Programs page explains:
The OIS will allow Marines engaged in combat, stability and security, and force protection operations to employ an intense visual cueing device to hail and warn personnel and vehicle operators at safe standoff distances.
The effective range of the OIS and its ability to automatically regulate dazzling laser energy to keep it below hazardous levels will allow us to challenge potential threats at greater distances than currently available while minimising fatalities and limiting collateral damage.
So, technically, they don't cause permanent blindness, but getting a faceful of this laser beam will temporarily blind and disorient a driver. Which, while uncomfortable, is still a much better option than being plugged full of 5.56mm NATO rounds.
The USMC has just announced plans to purchase more than 1800 of these hand-held devices and will soon be fielding them as part of its Escalation of Force Mission Module Kits. [Kitup - Wiki - Optronics - DoD - USMC C&P]