Afghan President Hamid Karzai today admitted that his office has received funding from Iran.
He said that once or twice a year Iran gave up to 975,000 dollars (£620,000) for official presidential expenses.
He says the US knew about the Iranian assistance for years and that Washington also gives the palace "bags of money."
Mr Karzai's comments were in response to a The New York Times report yesterday that Iran was giving cash to the Afghan president's chief of staff, Umar Daudzai, to buy his loyalty and promote Iranian interests in Afghanistan.
The newspaper quoted unnamed sources saying the money had been used to pay Afghan politicians, tribal elders - even Taliban commanders.
Mr Karzai said several nations give his office money because it lacks revenue.Reuse content