diff --git a/optimum/habana/transformers/generation/utils.py b/optimum/habana/transformers/generation/utils.py
index b963270fdd..728da18ea8 100755
--- a/optimum/habana/transformers/generation/utils.py
+++ b/optimum/habana/transformers/generation/utils.py
@@ -215,6 +215,8 @@ def _update_model_kwargs_for_generation(
 
         if token_idx is not None:
             token_idx.add_(1)
+            if "token_idx_cpu" in model_kwargs:
+                model_kwargs["token_idx_cpu"] += 1
 
         return model_kwargs
 
@@ -576,6 +578,7 @@ def generate(
                     # token_idx is the current index in the generation process, it is incremented each time a new token is generated
                     token_idx = inputs_tensor.shape[-1]
                     model_kwargs["token_idx"] = torch.tensor(token_idx, device=inputs_tensor.device)
+                    model_kwargs["token_idx_cpu"] = token_idx
                     if generation_config.max_new_tokens is None:
                         generation_config.max_new_tokens = generation_config.max_length - token_idx
                     inputs_tensor = torch.nn.functional.pad(
@@ -670,6 +673,7 @@ def generate(
         model_kwargs["attn_softmax_bf16"] = generation_config.attn_softmax_bf16
 
         # determine whether limit_hpu_graphs needs to be used
+        model_kwargs["use_hpu_graphs"] = hpu_graphs
         model_kwargs["limit_hpu_graphs"] = generation_config.limit_hpu_graphs
 
         # prepare for allocate kv cache
@@ -1333,8 +1337,9 @@ def greedy_search(
         hb_profer.start()
         this_peer_finished = False  # used by synced_gpus only
         bucket_size = model_kwargs.get("bucket_size", -1)
+        bucket_internal = model_kwargs["bucket_internal"]
         reduce_recompile = model_kwargs.get("reduce_recompile", False)
-        prev_idx = None  # avoiding calculate cache_idx when its value is not changing
+        prev_idx = -1  # avoiding calculate cache_idx when its value is not changing
         bucket_internal = model_kwargs.get("bucket_internal", None)
 
         prompt_len = input_ids.shape[-1]
@@ -1362,23 +1367,12 @@ def greedy_search(
                 if this_peer_finished_flag.item() == 0.0:
                     break
 
-            if bucket_size > 0:
-                if not bucket_internal:
-                    # it will not have been padded if bucket_size > 0
-                    params = next(inc)
-                    input_ids, model_kwargs = self.update_model_kwargs_for_bucketing(
-                        params, input_ids, model_kwargs, pad_token_id, bucket_size, reduce_recompile
-                    )
-                else:
-                    # Calculate slice idx for kv cache. Breaking down the kv cache in the attention block helps to reduce computation time.
-                    if model_kwargs.get("token_idx") <= (model_kwargs["kv_cache_len"] // bucket_size) * bucket_size:
-                        idx = torch.div(model_kwargs.get("token_idx") - 1, bucket_size, rounding_mode="floor")
-                        if idx != prev_idx:
-                            cache_idx = (idx.item() + 1) * bucket_size
-                            model_kwargs["cache_idx"] = cache_idx
-                            prev_idx = idx
-                    else:
-                        model_kwargs["cache_idx"] = model_kwargs["kv_cache_len"]
+            if bucket_size > 0 and not bucket_internal:
+                # it will not have been padded if bucket_size > 0
+                params = next(inc)
+                input_ids, model_kwargs = self.update_model_kwargs_for_bucketing(
+                    params, input_ids, model_kwargs, pad_token_id, bucket_size, reduce_recompile
+                )
 
             # prepare model inputs
             model_inputs = self.prepare_inputs_for_generation(input_ids, **model_kwargs)
@@ -1453,6 +1447,16 @@ def greedy_search(
             model_kwargs = self._update_model_kwargs_for_generation(
                 outputs, model_kwargs, is_encoder_decoder=self.config.is_encoder_decoder
             )
+            if bucket_size > 0 and bucket_internal:
+                # Calculate slice idx for kv cache during the decode phase.
+                # Breaking down the kv cache in the attention block helps to reduce computation time.
+                if model_kwargs.get("token_idx_cpu") <= (model_kwargs["kv_cache_len"] // bucket_size) * bucket_size:
+                    idx = (model_kwargs.get("token_idx_cpu") - 1) // bucket_size
+                    if prev_idx != idx:
+                        model_kwargs["cache_idx"] = (idx + 1) * bucket_size
+                        prev_idx = idx
+                else:
+                    model_kwargs["cache_idx"] = model_kwargs["kv_cache_len"]
             cur_len = cur_len + 1
 
             # if eos_token was found in one sentence, set sentence to finished
diff --git a/optimum/habana/transformers/models/llama/modeling_llama.py b/optimum/habana/transformers/models/llama/modeling_llama.py
index f811bc38e5..de0d5aa0f4 100755
--- a/optimum/habana/transformers/models/llama/modeling_llama.py
+++ b/optimum/habana/transformers/models/llama/modeling_llama.py
@@ -291,7 +291,8 @@ def pre_attn_forward(
             if cache_idx is not None and q_len == 1:
                 key_states = key_states[:, :, :cache_idx, :]
                 value_states = value_states[:, :, :cache_idx, :]
-                attention_mask = attention_mask[:, :, :, :cache_idx]
+                if attention_mask is not None:
+                    attention_mask = attention_mask[:, :, :, :cache_idx]
                 kv_seq_len = key_states.shape[-2]
 
         if use_cache: