We calculate the Euclidean action of a pair of Z2 monopoles (instantons), as a function of their spatial separation, in D=2+1 SU(2) lattice gauge theory. We do so both above and below the deconfining transition at T=Tc. At high T, and at large separation, we find that the monopole `interaction' grows linearly with distance: the flux between the monopoles forms a flux tube (exactly like a finite portion of a Z2 domain wall) so that the monopoles are linearly confined. At short distances the interaction is well described by a Coulomb interaction with, at most, a very small screening mass, possibly equal to the Debye electric screening mass. At low T the interaction can be described by a simple screened Coulomb (i.e. Yukawa) interaction with a...