Neil Diamond Awkward Moment With Chick Who Inspired 'Sweet Caroline'

12/28/2011 8:55 AM PST BY TMZ STAFF

Neil Diamond has said "Sweet Caroline" was inspired by a photo of a 4-year-old Caroline Kennedy -- hence the awkward laughter when Caroline recited the line, "touching me, touching you" back at the singer during the Kennedy Center Honors event last night.

Diamond insists there was nothing pervy about the song -- in 2007, he explained, "It was a picture of a little girl dressed to the nines in her riding gear, next to her pony ... It was such an innocent, wonderful picture, I immediately felt there was a song in there."

Still, kinda weird ... right?