The New York Democrat made the remark at a fund-raiser Saturday. During an event here for Senate candidate Nancy Farmer, Clinton introduced a quote from Gandhi by saying, "He ran a gas station down in St. Louis."
After laughter from many in the crowd of at least 200 subsided, the former first lady continued, "No, Mahatma Gandhi was a great leader of the 20th century."
In a nod to Farmer's underdog status against Republican Sen. Kit Bond, Clinton quoted the Indian independence leader as saying: "First they ignore you, then they laugh at you, then they fight you, then you win."
The director of a U.S. center devoted to Gandhi's teachings said the remarks amounted to stereotyping and were insensitive.
After being approached by The Associated Press to clarify the remarks, Clinton suggested in a statement late Monday that she never meant to employ the stereotype — often used as a comedic punch line — that certain ethnic groups run America's gas stations.
On Tuesday, she told reporters in Albuquerque, N.M.: "It was a lame attempt at humor and I am very sorry that it might have been interpreted in a way that causes stress to anyone. I have the highest regard for Mahatma Gandhi and have been a longtime admirer of his life."
Michelle Naef, administrator of the M.K. Gandhi Institute for Nonviolence, a Memphis, Tenn.-based organization founded in 1991 by a Gandhi grandson, credited Clinton and her husband, former President Clinton, with long having "supported the Gandhi message." But she said Saturday's remarks "could be incredibly harmful."
"I don't think she was, in any way, trying to demean Mahatma Gandhi," Naef said. "To be generous to her, I would say it was a poor attempt at humor. Perhaps I'm overly sensitive, but I find it offensive when people use stereotypes in that way."
Safir Ahmed, a spokesman for Farmer, said no one should be upset about "just a little flip remark."
"As an Indian-American myself, I was not offended by what Senator Clinton said," Ahmed said. "It (the quote) was clearly something Senator Clinton loved, and she referred to Mahatma Gandhi as one of the greatest leaders.
"I don't understand why anyone would take any offense or remotely think Senator Clinton harbors anything against Indian-Americans."
Senate Republicans criticized Farmer for not apologizing herself.
"Nancy Farmer should apologize for the remarks that were made at her fund-raiser," said Dan Allen, spokesman for Senate Republicans' campaign arm, the National Republican Senatorial Committee.
Flip remarks have caused trouble for Sen. Clinton before. In March 1992, when her husband was seeking the Democratic nomination for president, she offended some housewives when she defended her choice to be a career woman.
"I suppose I could have stayed home and baked cookies and had teas," she said.
Gandhi was a lawyer and civil rights activist who eventually renounced worldly goods and articulated a strategy of non-violence as he led the quest for Indian independence. He was assassinated on Jan. 30, 1948.