"We provide assistance and aid to the Afghan government through a fairly well-established developmental aid program. We're not in the big bags of cash business," the White House Press Secretary, Robert Gibbs, told reporters at his daily news conference.
"The United States provides assistance through US aid and development programs. We provide aid through a process that's appropriated through Congress, goes through steps and helps in a series of development projects and improves democracy and governance," he said.
Karzai had acknowledged on Monday that he receives millions of dollars in cash from Iran. But he added that Washington gives him "bags of cash" too because his office lacks funds.
Meanwhile, former Afghan Minister, Ali Jalali, told the PBS news hour that accepting cash is not a new development in Afghanistan.
"As far as the cash assistance is concerned, I think it is not a secret. Many times, I heard it from President Karzai in the Cabinet meeting, that he said he used it for certain projects and as well as the US helps Afghanistan, not only the government, but even some, you know, power brokers with cash and money," he said.
Pointing out that the situation in Afghanistan is very complex, Jalali said, "there are so many hands in the jar, therefore it's not surprising."
"I don't think Iran can buy Afghanistan with that kind of money. President Karzai and all Afghans, I think, believe that the magnitude of the US' investment in Afghanistan in the presence of so many troops and the commitment of the US, is beyond the imagination that somebody will undermine that with some money," he said.
Jalali agreed that Afghanistan has to live with its neighbours and he said dealing with neighbours will not undermine commitment of the international community to the war-torn country.
He cautioned the international community on Karzai bashing saying that this will backfire.
"Things are not going well. There's no doubt about that. But I think, unfortunately, instead of trying to solve these problems, defuse these tensions, the -- this Karzai-bashing is not going to help," he said
