He was speaking a day after President Hamid Karzai was sworn in as Afghan President on Thursday after a controversial election.

Mr. Gates added that donors should tighten control over the "significant influx" of money into the country.

Western leaders have put pressure on Mr Karzai to deal with corruption and remove former warlords from government.

While considering whether to send up to 40,000 more troops to tackle the Taliban in Afghanistan, US President Barack Obama has also spoken out about the need to fight corruption in that country. 

He said the US and other foreign donors should act whenever they find signs of corruption in their contracts or development projects with Afghan or international groups.

In response, Mr Karzai pledged to clean up the country's politics, saying corruption was "a dangerous problem".