Iran acknowledged Tuesday it has been sending funds to neighboring Afghanistan for years, but said the money was intended to aid reconstruction, not to buy influence in the office of Afghan President Hamid Karzai.
Karzai said Monday he receives millions of dollars in cash from Iran, adding that Washington gives him "bags of money" too because his office lacks funds.
In Washington, President Barack Obama's press secretary, Robert Gibbs, denied that. "We're not in the big bags of cash business," he said Tuesday.
Earlier, State Department spokesman P.J. Crowley said some of the U.S. aid to Afghanistan is in cash.
U.S. officials asserted the money flowing from Tehran was proof that Iran is playing a double game in Afghanistan - wooing the government while helping Taliban insurgents fighting U.S. and NATO forces. Iran denies that.
"Iran has provided the country with plenty of help," Foreign Ministry spokesman Ramin Mehmanparast said Tuesday in his weekly news briefing in Tehran. "Iran has helped construction of Afghanistan and the preparation of its economic infrastructure and it will pursue it in the future, too."
Mehmanparast said Iran's help began years ago. He said peace and stability in Afghanistan is important for Iran.
The acknowledgment prompted a challenge from seven Iranian lawmakers who demanded that Foreign Minister Manouchehr Mottaki appear before parliament to clarify the payments, according to the news website www.Khabaronline.ir.
The call indicated that lawmakers - who have the power to impeach ministers - were unaware of the payments. Under Iran's constitution, government funds sent abroad, including aid donations and loans, must get parliamentary approval.
In a letter, the lawmakers demanded to know the amount of money sent over the past five years, where it came from, the way it was transferred and the legal basis for the payments.
On Saturday, The New York Times reported that Iran was giving bags of cash to President Karzai's chief of staff, Umar Daudzai, to buy his loyalty and promote Iranian interests in Afghanistan. The Times quoted unidentified sources as saying the cash amounted to a slush fund that Karzai and Daudzai used to pay lawmakers, tribal elders - and even Taliban commanders - to secure their loyalty.
Karzai told reporters Monday that he had instructed Daudzai, a former ambassador to Iran, to accept the money from Tehran.
Before Karzai spoke, the Iranian Embassy in Afghanistan dismissed the allegations that the Iranian government was making cash payments to Daudzai, calling them "ridiculous and insulting."
Iran publicly opposed the U.S.-led offensive that toppled the Taliban after the Sept. 11, 2001, terrorist attacks in the United States, though its relations with the Taliban regime had been frosty.
Iran is believed to not want the Taliban to return to power. But it remains wary of a long-term U.S. military presence on its doorstep in both Iraq and Afghanistan.