Dayana Jadarian, a candidate in Sörmland, eastern Sweden, posted the video on her personal Facebook page in late July. The clip entitled 'The insanity of Christian Zionism' is fronted by Duke, who has long been associated with the right-wing white nationalist movement in the US.
In the video Duke makes a number of claims such as that Jews control the American media and are responsible for the war in Iraq. When Jadarian uploaded the clip she was challenged by a number of users who pointed out that Duke used to lead the Ku Klux Klan.
"What he says is facts and everyone knows it but many want to suppress it," Jadarian said in comment which she later deleted.
The politician claimed to be unaware of Duke's background and later posted a lengthy rebuttal to people who suggested that she was racist.
"It turned out that Duke was branded by some media as a racist. I had no information about that. Now, in the actual clip there was nothing that was racist."
Jadarian added; "I think that it's sick that I have to say it but I'm not a racist, never have been and never will be."
Jonathan Leman of the Swedish anti-racist magazine Expo said that Duke was renowned for his hostility towards Jews.
"He is a Jew-hater who sets out to reach neo-Nazis and other right-wing extremist groups that are anti-Semitic," Leman told the Metro newspaper.
The Duke video is still on Jadarian's Facebook page. She remains a candidate for the Centre Party in Sörmland and is listed on the party's website alongside four other members of the party.
"You can't stand for racist views and be a candidate for us," the Centre Party's party secretary Michael Arthursson told the TT news agency.
The district chairperson of the Centre party in Sörmland said that he had spoken to Jadarian about the matter but that she is unlikely to be removed from the ballot.
The controversy comes barely 24 hours after a 20-year-old Sweden Democrat candidate quit after pictures emerged of her wearing a Nazi armband.