Deputy Defense Secretary Paul Wolfowitz (search) insisted Tuesday that Iraqi politician Ahmad Chalabi's (search) organization provided information that helped U.S. forces in Iraq but conceded that some of Chalabi's recent behavior was "puzzling."

Wolfowitz, testifying before the House Armed Services Committee, denied that Chalabi was ever a favorite of the Pentagon, as he has been widely described.

Chalabi's star has fallen in recent months because much of the intelligence his group supplied on Iraq's alleged weapons of mass destruction programs failed to pan out. Last month, U.S. soldiers and Iraqi police raided his residence and office. Allegations then surfaced that he supplied Iranians with classified U.S. intelligence on American monitoring of Iranian communications.

Responding to questions from Rep. Ike Skelton, D-Mo., the committee's top Democrat, Wolfowitz would only say that many Iraqi exiles opposed to Saddam Hussein had contacts with Iran (search), lraq's enemy in the 1980s.

"Nothing in Iraq is black and white. I don't think I know of any figure we're dealing with who hasn't had in one way or another to compromise with the incredibly difficult circumstances of the last 35 years of that country's history," Wolfowitz said. "It's not surprising that many of them -- and Chalabi's not the only one -- made contacts with countries like Iran or Syria or others."

Wolfowitz, the No. 2 Defense Department official, said Chalabi's group, the Iraqi National Congress (search), had supplied useful information to U.S. forces.

"There's a mixed picture there," he said. "We know from our commanders that some of the intelligence that his organization has provided us has saved American lives and enabled us to capture some key enemy targets."

Chalabi blamed the CIA for his problems and denied wrongdoing. The CIA and Chalabi have been at odds for years.

"I am surprised that he seems to be the target, for many years, of particular animus from some parts of this government," Wolfowitz said. "But on the other hand, there are aspects of his recent behavior that are puzzling to me." He did not elaborate on what those activities were.

Wolfowitz said the Defense Department would provide the House panel with a classified accounting of how U.S. money supplied to Chalabi and his group was spent.