The flyers targeting Ravinder Bhalla, the first Sikh to hold elected office in New Jersey, were placed on car windshields on Friday night, New York Daily News reported.
They have a photo of New Jersey Councilman Bhalla. In red letters above him, the flyers read: "Don't let terrorism take over our Town!", it added.
The report alleged that the leaflets appear to be a modified version of mailers sent out by another Hoboken mayoral candidate, Mike DeFusco. The original flyers accused Bhalla of having a potential conflict of interest.
Officials in New Jersey are condemning flyers that paint the Sikh politician running for the mayor of Hoboken as a terrorist.
DeFusco condemned the altered flyers in a statement yesterday.
"Today I spoke out not only against the racist, disgusting flyers targeting Ravi Bhalla that appeared last night and was made to look like it came from my campaign, but also against the rest of the hate that has been shamefully displayed throughout this race," DeFusco said.
DeFusco said he has also been the victim of hateful rhetoric accusing him of being a part of a "crime family" and attacking his sexuality, the report said.
He would be Hoboken's first gay mayor, if elected.
Bhalla addressed the terrorism flyers yesterday, calling them "troubling" in a statement.
"We won't let hate win in Hoboken," he said.
"I want to use this incident as an opportunity to affirm to each other and our children the value of living in a diverse community where we are judged by the content of our character - not by the colour of our skin or how we worship," Bhalla said in the statement.
Senator Cory Booker posted a photo of the flyers to his Twitter account. He called it "vile" and "hateful" and said, "We all must condemn bigotry & hate!"
Six candidates are vying to replace outgoing Mayor Dawn Zimmer in the election on Tuesday.
The flyers appeared days after racist campaign mailers attacking two Asian school board candidates in Edison evoked the campaign slogan of President Donald Trump and claimed Chinese and Indian residents are "taking over" the town.