Hagel did not indicate whether he believes the policy should be overturned. However, he said "every qualified American who wants to serve our country should have an opportunity if they fit the qualifications and can do it."
Transgender individuals have a sexual identity that is not clearly male or female. A panel convened by a think tank at San Francisco State University recently estimated that about 15,450 transgender personnel serve in the military and in the National Guard and Reserve.
In 2010, Congress passed legislation allowing gays and lesbians to serve openly. Hagel said the issue of transgender serving in the military is more complicated. He said "these issues require medical attention" that at times cannot be provided in austere locations.
The National Center for Transgender Equality said it welcomed Hagel's comments, which were made on ABC's "This Week." The organization's executive director, Mara Keisling, said the regulations that disqualify transgender recruits and service members are based on outdated prejudices and stereotypes.
"If the secretary were able to meet and talk with the trans service members I've met, he'd understand the answer is self-evident. These are amazing people who serve even though they must hide a basic part of who they are," Keisling said.
SPART(asterisk)A, an advocacy group made up of lesbian, gay, bisexual or transgender people who now serve or once served in the military, said a review was long overdue.
"Many of our allies, including the UK, Australia and Israel, allow transgender people to serve with pride and honor in their armed forces. It's time for the U.S. to join them," said Allyson Robinson, the group's policy director and a former Army captain.
A military review of transgender issues could occur as it also deals with questions about how to treat transgender prisoners. Chelsea Manning, a former Army private serving a 35-year prison sentence for providing classified documents to WikiLeaks, is fighting to be treated as a woman. She is seeking a counselor who specializes in gender issues and also wants to get hormone replacement therapy, which the military has said it does not provide.