Marked with traditional pomp and show, the full military honours accorded to Karzai included a 21-gun salute, which is rarely given to a foreign dignitary.
Following the event, Karzai and Panetta led their respective delegations for intensive consultations on a range of issues, which among other things included the bilateral security agreement and number of troop presence in the country after the security transition is completed in 2014.
Panetta among others was joined by Gen Martin Dempsey, Chairman of the Joint Chiefs Of Staff, in the meeting.
Karzai is also scheduled to meet US Secretary of State Hillary Clinton at the Department of State today.
Tomorrow, Karzai would meet US President Barack Obama at the White House, after which both the leaders are scheduled to issue a joint statement.