By-BBC
Afghan President Hamid Karzai has acknowledged that his office has received cash from Iran, but insists it was part of a "transparent" process.
Mr Karzai was responding to a report in the New York Times that Tehran had been passing bags stuffed full of cash to Mr Karzai's aides.
www.bbc.co.uk
The cash was intended to promote Iran's interests in Kabul, the report said.
Speaking at a news conference, he said many countries had given money to Afghanistan in this way, including the US.
"The government of Iran has been assisting us with five or six or seven hundred thousand euros once or twice every year, that is an official aid," he told reporters, according to the AFP agency.
He said his chief of staff, Umar Daudzai, "is receiving the money on my instructions".
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"The cash payments are done by various friendly countries to help the presidential office and to help dispense assistance... in various ways to the employees around here, to people outside, and this is transparent," he said.
"This is something that I have also discussed... at Camp David with President Bush. This is nothing hidden.
"We are grateful for the Iranian help in this regard. The United States is doing the same thing, they're providing cash to some of our offices."
The New York Times report said that last August, at the end of an official visit to Iran by Mr Karzai, a large bag of euro notes had been passed to Mr Daudzai by Iran's ambassador to Afghanistan, Feda Hussein Maliki.
www.afghanconflictmonitor.org
It was part of a "secret, steady stream of Iranian cash to buy the loyalty of Mr Daudzai and promote Iran's interests in the presidential palace", the report said, citing Afghan and Western officials.
The officials alleged that the payments, totalling millions of dollars, had been used to pay Afghan politicians, tribal elders and even Taliban commanders to secure their loyalty.
"It's basically a presidential slush fund," one Western official is quoted as saying.
Report 'ridiculous'
On Monday, the Iranian embassy in Kabul strongly denied the report, describing the claims as "ridiculous and insulting".
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"Such baseless speculations are being spread by some Western media outlets in order to confuse public opinion and damage the strong ties between the governments and nations of the Islamic republics of Afghanistan and Iran," a statement said.
The BBC's Quentin Sommerville in Kabul says that although such cash payments may look suspicious, Afghanistan's financial systems are very basic and many foreign governments often hand over cash.
However, he adds that Iran's involvement in Afghanistan makes many of Kabul's international partners uneasy, and the cash payments will raise the question of what Tehran wants in return for its money.
www.earthtimes.org
