The State Department on Monday said it is skeptical about Iranian motives in providing large cash payments to aides to Afghan President Hamid Karzai.  U.S. officials also acknowledge giving some aid money in cash to Afghan authorities, but that the practice has diminished in recent years.

Officials here say that as a sovereign country, Afghanistan can accept foreign aid money in whatever form it chooses.

But they say they are leery about Iran's motives in making large cash payments directly to the office of President Karzai.

They say they are also concerned about the effect such behavior might have on the Afghan government's public image in the United States and elsewhere.

The comments follow the acknowledgment by Mr. Karzai that his office received "bags of money" from Iran, in what The New York Times newspaper reported Sunday was part of an effort by Tehran to drive a wedge between Afghanistan and its Western allies.

At a news briefing, State Department Spokesman P.J. Crowley said the United States is concerned about the payments because of Iran's past "negative" role in the affairs of its neighbors.

"We'll let the government of Afghanistan speak to how they spend the financial assistance received from other countries," said P.J. Crowley. "But we remain skeptical of Iran's motives, given its history of playing a destabilizing role with its neighbors.  We hope that Iran will take responsibility to play a constructive role in the future of Afghanistan."

In Kabul, President Karzai said Monday that his chief aide had accepted the Iranian cash on his instructions and that it is being paid because Iran wants good relations with Afghanistan.

He said the payments were not secret or unusual.

"This is transparent," said  President Karzai. "This is something that I have also discussed even when we were at Camp David with [former] President [George W.] 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.  If you'd like the have the details, we'll give you that, too."

At the State Department, spokesman Crowley acknowledged that the United States has delivered Afghan aid money in cash.  But he said the practice has greatly diminished in recent years.

"In many of the accounts of the early stages of our presence in Afghanistan, much of the assistance that we brought, we brought with us," he said. "And so that assistance did come in the form of cash.  But since that time, we have more institutionalized our support.  And the vast, vast, vast majority of that now flows through institutions of the Afghan government or through our international partners, both governments and non-governmental organizations."

Crowley said he could not rule out the possibility that some U.S. government funds are still being given in cash.

The New York Times says the Afghan leader and his staff were using foreign cash to secure the loyalty of Afghan lawmakers, tribal leaders and even Taliban commanders.

Earlier this year, key members of the U.S. Congress moved to curtail the multibillion dollar U.S. aid program to Afghanistan amid reports of rampant official corruption there.

A senior State Department official acknowledged that the latest disclosures might further damage the U.S. public image of the Karzai administration, saying there is no doubt that the reports of bags of money changing hands "are not great optics."