"What Donald Trump is saying is shameful. It is disrespectful to the people who were killed and wounded, and their families. And it is yet more evidence that he is temperamentally unfit and totally unqualified to be Commander- in-Chief," Clinton told her supporters in Pittsburgh.
In an interview on Fox News, Trump had said, "People cannot believe that President Obama is acting the way he acts and can't even mention the words 'radical Islamic terrorism'".
In her hard hitting speech, Clinton urged the Republican leadership to rebuke this "dangerous rhetoric".
"Will responsible Republican leaders stand up to their presumptive nominee or will they stand by his accusation about our president? History will remember what we do in this moment. Americans don't need conspiracy theories and pathological self-congratulations. We need leadership, common sense and concrete plans," she said.
"Of course, he (Trump) is a leader of the birther movement, which spread the lie that President Obama wasn't born in the United States. I guess he had to be reminded Hawaii is part of the United States," Clinton continued.
"This is the man who claimed a distinguished federal judge born and raised in Indiana can't do his job because of his - quote - 'Mexican heritage'. I guess he has to be reminded Indiana is in the United States," she said.
"So maybe we shouldn't be surprised. But it was one thing when he was a reality TV personality. You know, raising his arms and yelling, you're fired. It is another thing altogether when he's the Republican Party's presumptive nominee for president," the former secretary of state said.
Accusing Trump of being "fixated" on the words "radical Islam", Clinton asked "is the GOP leader suggesting that there are magic words that, once uttered, will stop terrorists from coming after the US?"
"Trump, as usual, is obsessed with name-calling. From my perspective, it matters what we do, not just what we say. In the end, it didn't matter what we called bin Laden - it mattered that we got bin Laden," she said.
"I have clearly said that we face terrorist enemies who use a perverted version of Islam to justify slaughtering innocent people. We have to stop them, and we will. So if Donald suggests I won't call this threat what it is, he hasn't been listening. But I will not demonize and declare war on an entire religion," Clinton said.
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