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The National Institutes of Health will fund human embryonic stem cell research on cells donated by fertility clinic patients, but not cloned cells, the federal agency said Friday. NIH will also not fund any cell research mixing human and animal embryonic cells, so-called "chimeras."

"No question these guidelines will greatly expand the number of cells available for research," says acting-NIH head Raynard Kington.

In March, President Obama called for increased federal support of embryonic stem cell research, and requested the NIH guidelines. "We think this is the best way to pursue research which is ethically acceptable," Kington says. NIH estimates it spent $74 million on human embryonic stem cell research last year.

In 1998, a University of Wisconsin team first isolated human embryonic stem cells in the lab. The cells are controversial because they are collected by destroying early-stage human embryos.  However, medical researchers say the cells may reveal the genetic origins of ailments and someday serve as sources of replacement tissues in everything from spinal cord injury to diabetes.

"We see this as tremendous progress. Some groups and scientists...