The American-Arab Anti-Discrimination Committee (ADC) said Kelly and Deputy Commissioner Paul Browne should immediately resign from their positions for taking part in the production of the 'Third Jihad', "a blatantly bigoted and hate-filled film vilifying the American-Muslim community".

The 72-minute film shows Muslims shooting Christians in the head and conveys a message that the community cannot be trusted. It also shows a doctored photo of an Islamic flag flying over the White House, car bombs exploding, executed children lying covered by sheets.

Its message is that the true agenda of much of Islam in America is to "infiltrate and dominate America".

The group said Kelly had "lied" to the community by initially denying any involvement in the film.

"The decision to take part in the film, as well as show the film to nearly 1,500 NYPD cadets raises serious concerns about Kelly's ability to serve and protect minority groups in New York City," the group said.

ADC President Warren David said the residents of New York deserve "transparency, honesty, integrity" and not a leader like Kelly who lacks all these qualities.

The New York chapter of the Council on American-Islamic Relations along with the Muslim American Civil Liberties Coalition (MACLC) and other minority and civil liberties groups said the revelation about the use of the video during police training comes following a year-long series of "misstatements and retractions" from Kelly and Browne that indicates a total disregard for the civil rights of American Muslims and a complete lack of respect for one of the city's largest religious communities.

"This controversy has moved beyond an issue of poor judgement in the use of an Islamophobic training film to an issue of the integrity of public officials," said CAIR-NY Civil Rights Manager Cyrus McGoldrick.

"The lack of truthfulness exhibited by Commissioner Kelly and Deputy Commissioner Browne means New Yorkers must now question the credibility of every statement they make. This situation necessitates their immediate resignations".

As leaders of the nation's largest police department, Kelly and Browne's actions set a tone for relations with law enforcement that impact American Muslims nationwide, CAIR National Executive Director Nihad Awad said in a statement.

"It's time for change".

McGoldrick said when the issue first came to light last year, CAIR-NY had called on the NYPD to investigate how the propaganda film came to be used in the counterterrorism training but received no response beyond dismissals of the allegations as "wrong" and "a non-issue".

McGoldrick added that the community is already concerned that NYPD officers and FBI agents spied on Muslims by infiltrating their houses of worship and Muslim student groups.

Browne had initially said Kelly had not given an interview for the film and that a clip featuring the police commissioner was lifted from an old interview.

He later said he had helped arrange Kelly's interview for the filmmakers.

Mayor Michael Bloomberg sought to defend the police commissioner but said Kelly would have to work harder to regain the trust of the Muslim community.

"Anything like this doesn't help credibility," Bloomberg said.

"Ray's got to work at establishing, or re-establishing, or reinforcing the credibility that he does have" with the Muslim community.

"Ray Kelly probably visits more mosques than an awful lot of people who believe in the faith that's practiced there," Bloomberg said.

"He has reached out to this community as he has reached out to lots of other communities... And we'll continue to do that".

In a statement, Browne said he agreed with the mayor and said "I could have done a better job in providing a fully accurate account sooner".