Iran acknowledged on Tuesday giving "assistance" to Afghanistan after President Hamid Karzai admitted receiving bags of cash from Tehran, sparking US concerns about its arch-foe's expanding influence.
Karzai insisted at a news conference in Kabul on Monday that the payments to his chief of staff — sometimes as much as $980,000 dollars at a time — were transparent handouts for his presidential office.
"The Islamic Republic of Iran, as a neighbouring government, is deeply concerned about Afghanistan's stability, and has given much assistance for the reconstruction of Afghanistan," foreign ministry spokesman Ramin Mehmanparast said when asked to comment on Karzai's announcement.
"The Islamic Republic of Iran has done its part in helping Afghanistan rebuild and develop its economy and will do so in the future," Mehmanparast said, without elaborating on the form of the assistance.
The case has raised hackles in Washington, which is trying to quicken an end to years of war in Afghanistan, amid fears that Iran could be funding insurgents or trying to exploit anti-Western sentiment in the Kabul government.
White House deputy spokesman Bill Burton said: "I think the American people and the global community have... every reason to be concerned about Iran trying to have a negative influence on Afghanistan."
He said Iran had a responsibility to "ensure that Afghanistan is not a country where terrorists can find safe harbour, or where attacks can be planned on their soil".
There have been no diplomatic relations between Iran and the United States for three decades. Since America's post-9/11 wars, Iran has been concerned by a US military buildup on its eastern border, as well as to the west in Iraq.
Despite their rivalry, Washington and Tehran are both sworn enemies of the Sunni Taliban militia which ruled Kabul from 1996 until the 2001 US-led invasion of Afghanistan.
The New York Times reported Saturday that Karzai's chief of staff, Umar Daudzai, received regular payments from Iran. The paper cited officials as saying that the Iranian payments were intended to secure the allegiance of Daudzai, a former ambassador to Iran who consistently advocates an anti-Western line to Karzai and briefs him
daily.
Karzai angrily denied that the payments were secret and likened them to financial assistance handed out by the United States to the Afghan government. "We are grateful for Iranian help in this regard. The United States is doing the same thing. They're providing cash to some of our offices."