The allegations, which have been made by anti-Kerry group the Swift Boat Veterans for Truth, a group of men who served during the war, have been vehemently denied by the Kerry camp.
The ad has triggered speculation about "dirty tricks" by the Republicans although the party has denied this, saying it has not and would not attack Kerry's war record.
"We have not and we will not question Senator Kerry's service in Vietnam,'' White House spokesman Scott McClellan said.
Democrat Presidential hopeful Kerry was awarded a Purple Heart and Bronze Star after his service in Vietnam, which has been at the centre of his campaign to win the Presidency from George W Bush who avoided service in Vietnam by serving in the National Guard.
The Republican Senator for Arizona, John McCain, whose war record was questioned during his battle with Bush for the Republican nomination in 2000, stuck up for Kerry. "I deplore this kind of politics. I think the ad is dishonest and dishonourable."
McCain also noted that none of the soldiers in the ad had served on Kerry's boat during the war. He called on the President to apologise for the ad.
The one-minute long ad, which is running in Midwest battleground states, accuses Kerry of lying to get his medals and betraying his fellow soldiers after he turned against the war on coming home from Vietnam.
In the ad, Robert G Elder, who like Kerry was a swift boat commander, says: "John Kerry is no war hero.''
Kerry's lawyers have sent letters to TV stations urging them not to broadcast the ad, which has already been shown across three swing states.
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