From WaPo:

An appeals court Thursday lifted a temporary injunction barring the federal government from funding research involving human embryonic stem cell research.

A three-judge panel of the U.S. Circuit Court of Appeals for the District of Columbia granted a request from the Justice Department to stay an injunction issued Aug. 23 blocking the funding. In a major victory for supporters of the research, the court said the Obama administration could resume funding the research pending a full appeal of the case.

U.S. District Judge Royce C. Lamberth, ruling in a lawsuit filed by two researchers working on alternatives to the cells, said the funding violated a federal rule that prohibits federal tax money from being used for research that involves the destruction of human embryos.