The Republican frontrunner vowed to “quickly cut off the head” of ISIS and “take their oil”.
Trump also repeated his controversial call for a temporary ban on foreign Muslims entering the US until the country “can figure out what’s going on”.
The 30-second ad begins with a deep-voiced narrator saying: "The politicians can pretend it's something else but Donald Trump calls it radical terrorism.”
Images of Barack Obama and Hilary Clinton are shown followed by photos of the San Bernardino terrorists who killed 14 people in a mass shooting in December last year.
The narrator then adds: "That's why he's calling for a temporary shutdown of Muslims entering the United States until we can figure out what's going on."
The ad also features images of a US battleship launching a missile strike, the aftermath of the San Bernardino shooting and immigrants crossing the US border.
The narrator says Trump will "stop illegal immigration by building a wall on our southern border that Mexico will pay for".
The ad, which is approved by Mr Trump at the beginning, ends with the presidential candidate promising to “make America great again”.
The ad, titled “Great Again”, will be broadcast in Iowa and New Hampshire - the first two states to vote in the race for the Republican nomination next month.
Trump, who has largely benefited from free publicity from US television channels, has decided to launch a series of ads because he doesn’t “want to take any chances” despite having “such a big lead”.
He told the Washington Post: "I'm $35 million to $40 million under budget and, to be honest, I don’t think I need ads because I have such a big lead.
“But I don’t want to take any chances and I almost feel guilty not spending money”, Express reported.
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