Milstein studied at Hayil school in Tel Aviv's Yad Eliyahu neighborhood, Hadassim youth village and a high school in Tel Aviv. In 1958, he was drafted into the Israel Defense Forces (IDF) and served in the 890th Airborne Battalion of the Paratroopers Brigade as a soldier, squad commander and combat medic. Before being discharged, deputy commander of the brigade, Rafael Eitan, appointed him as the historian of the paratroopers. He served as a medic in the Six-Day War, the War of Attrition and the Yom Kippur War, and did his reserve duty in the history department of the Israeli Air Force.