U.S. Secretary of Defence Pete Hegseth has threatened to strip Democratic Senator and military veteran Mark Kelly of his Navy captain rank and cut his military retirement pay over remarks made in a widely circulated video.

Senator Kelly of Arizona and other members of Congress were heard in the recording weeks ago telling military officers they have the right to refuse alleged illegal orders.

Hegseth issued a formal letter of censure against Kelly, characterising the remarks as "reckless misconduct" aimed at undermining "military discipline".

In a statement on X, Hegseth said Kelly, a retired Navy captain, remains accountable to military justice and the Department of Defence.

Kelly vowed to fight back, saying, “Over 25 years in the U.S. Navy, 39 combat missions, and four missions to space, I risked my life for this country and to defend our Constitution, including the First Amendment rights of every American to speak out.”

“My rank and retirement are things that I earned through my service and sacrifice for this country,” he added.