US President Barack Obama has rejected claims by Republicans that $400 million his administration paid to Iran amounted to a ransom payment for the release of US prisoners.
Iran released five Americans in January in return for seven Iranians held by the US - just as sanctions were lifted against Tehran when an international deal was struck over its nuclear programme.
Republican presidential candidate Donald Trump has attacked the Obama administration over the affair.
However, his claims to have seen a video of cash being delivered in a plane to the Iranians are being dismissed by media organisations as well as the White House.
At a Pentagon press conference, Mr Obama said the money was to settle a dispute over arms contracts dating back to before the 1979 Iranian revolution.
"Some of you may recall we announced these payments in January. Many months ago. They were not a secret," he said, emphasising that the United States does not pay ransoms.
"We do not pay ransom for hostages. We have a number of Americans being held all around the world. I meet with their families. And it is heartbreaking," Mr Obama said.
On Tuesday the Wall Street Journal reported that cash had been loaded on wooden pallets and secretly airlifted to Iran in an unmarked cargo plane.
Mr Obama said that the timing of the delivery was "dictated by the fact that as a consequence of us negotiating around the nuclear deal, we had diplomatic negotiations with Iran for the first time in several decades".
Following the deal, US Secretary of State John Kerry was able to "meet with the foreign minister, which meant our ability to clear accounts on a number of different issues at the same time converged".
Mr Obama said non-payment of the owed money posed a "significant litigation risk" that could have cost the United States billions of dollars.
Cash was used for the payment because the US does not have a banking relationship with Iran - "precisely because we're so strict in maintaining sanctions," Mr Obama said.
"We could not send them a cheque. And we could not wire the money," he said.