The AR-15 rifle dubbed the "Crusader" is laser-etched on one side with a Knights Templar Long Cross -- a symbol of the Christian Crusades -- and a biblical verse on the other side.
Spike's Tactical which has marketed the rifle claims it was "designed to never be used by Muslim terrorists".
The company's spokesman, former Navy SEAL Ben "Mookie" Thomas was quoted by the Orlando Sentinel as saying that he came up with the idea and believes no devout Muslim would touch such a weapon.
The owners of Spike Tactical did not intend to insult or antagonise Muslims, Thomas said.
The safety selector that controls the Crusader's trigger has three settings: Peace, War and God Wills It.
The weapon is the latest of more than dozen models sold at gun shops, ranging in cost from USD 960 to about USD 3,000.
The sale of the gun comes amid fears of American weapons falling into the hands of Jihadist fighters.
In a new Islamic State video, jihadist fighters were shown flaunting the American M16 rifles that may have been seized by them from Iraqi soldiers or found in weapons caches dropped by the US.
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