Conway was also quizzed by CNN's Jake Tapper on "the sprays of falsehoods coming from the White House"
Kellyanne Conway has said she 'regrets tremendously' her references to a non-existent 'Bowling Green massacre'.
Mrs Conway - a senior adviser to Donald Trump - mentioned the fictitious attack during a television interview last week.
She later described the error as an 'honest mistake', but it has since emerged she had made other references to the 'massacre'.
Two Iraqi citizens living in Bowling Green, Kentucky were arrested in 2011 and later convicted of terrorism offences, including 'extensive terrorist activities against US soldiers in Iraq'.
The men were not charged with plotting attacks within the United States.
Speaking to Jake Tapper on CNN yesterday about the 'massacre' references, Mrs Conway admitted: "I regretted it tremendously... I used the wrong word to describe something several times.
"I felt really badly about that, and I apologise and I rectify. [But] I'm very happy to have raised awareness... I was referring to two Iraqi nationals who came to this country, and are still in jail, [who] were part of Al-Qaeda.
"I'm glad to have raised awareness, I'm sorry that I did it inartfully," she added.
During the lengthy and often heated interview, Mr Tapper grilled Mrs Conway over what he described as "sprays of attack and sprays of falsehoods coming from the White House".
President Trump has frequently criticised CNN as 'fake news' - alongside regular attacks on other media outlets such as The New York Times.
Mrs Conway argued: "I don't think CNN is 'fake news.' I think there are some reports everywhere, in print, on TV, on radio, in conversation, that are not well-researched and are sometimes based on falsehoods."
When quizzed by Tapper over 'demonstrably not true' claims by President Trump, Conway responded: "Are they more important than the many things that he says that are true that are making a difference in people's lives?"
You can watch the full interview below: