The U.S. said Iran shouldn't interfere with Afghanistan's internal affairs following a report that an Iranian official gave an aide of President Hamid Karzai a bag filled with packets of euro bills.

"We understand that Iran and Afghanistan are neighbors and will have a relationship," Philip J. Crowley, a State Department spokesman, said in an e-mailed statement "But Iran should not interfere with the internal affairs of the Afghan government."

A story in The New York Times Sunday reported that, in August, Iran's ambassador to Afghanistan, Feda Hussein Maliki, gave a plastic bag filled with euros to Karzai's chief of staff, Umar Daudzai, on Karzai's personal aircraft. The Times cited an Afghan official.

The payment, part of a stream that totals millions of dollars, was intended to promote Iran's interests and to counter U.S. and other western influence in Afghanistan, the Times said, citing unidentified Afghan and Western officials in Kabul.

"It's not totally surprising at all," said Isobel Coleman, a senior fellow at the Council for Foreign Relations. "The U.S. would be naive to think Iran is not trying to exert itself in Afghanistan." Anthony Cordesman, a senior defense analyst with the Center for Strategic and International Studies, said the payment shouldn't be a revelation for those with experience in the area.

"The truth is, you've been involved in a prolonged competition for influence in Afghanistan between the United States, Pakistan, India, Iran and to a lesser extent China and Russia since the start of this," Cordesman said Sunday.

"They should scarcely be surprised by cash payments because they're dealing with an economy where gray payments are part of the system." Karzai and Daudzai declined to respond to written questions from the Times about their relationship with Iran, the newspaper said. The Iranian ambassador also declined to answer questions, and his spokesman said the allegations were western media gossip, the newspaper said.

Iran has been providing funding for the government, as well as for its Taliban opponents, the Times reported, citing an unidentified senior NATO officer. Cash for the Taliban is aimed at undermining the U.S., not for ideological purposes, Coleman said.

"Iran has no love for the Taliban and the Taliban has no love for Iran," Coleman said. "It's not an ideological move between the groups, but a purely cynical move to support insurgent groups that tie down the United States." The militant Islamic Taliban controlled Afghanistan and sheltered the al-Qaida terrorist network before being ousted by a U.S.-led invasion of the country following the Sept. 11, 2001, attacks in the United States.

The U.S. cut diplomatic ties with Iran after the seizure of the American Embassy in Tehran, where 52 diplomats were held hostage for 444 days. They were taken hostage during the 1979 Islamic Revolution that ousted the monarchy and brought Shia Muslim clerics to power.

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