The US Olympic Committee has asked for the television commerical to be taken off the air and is awaiting a response.
The ad's voiceover says: "In 1972 there were 40 democracies in the world. Today, 120." Later it says: "And this Olympics there will be two more free nations. And two fewer terrorist regimes."
The ad, which tells viewers that "freedom is spreading through the world like a sunrise", has prompted complaints from Iraqi footballers unhappy about appearing in a political campaign. The team made it as far as the semi-finals before being knocked out by Paraguay this week.
Last week the Bush campaign said it was on firm legal ground with the ad and that there were no plans to axe it.
However, the International Olympic Committee fiercely guards the use of the word "olympics", to which it has the exclusive rights. The organisation proclaims its non-political status and its regulations state it cannot help someone to win an election.
Separately, one of Bush's advisers, lawyer Benjamin Ginsberg, has quit following revelations that he advised a group of Vietnam veterans behind a controversial commercial that criticised presidential rival John Kerry's war record.
Bush has since distanced himself from the campaign, funded by a pro-Republican group called Swift Boat Veterans For Truth.
Ginsberg is the second member of Bush's staff to step down after the ads appeared. The first, Ken Cordier, a veteran who appeared in one of the spots, quit at the weekend.
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