VATICAN CITY (Reuters) - President Barack Obama's lifting of restrictions on federal funding for human embryonic stem cell research puts him at odds with Pope Benedict and the American Roman Catholic Church.

After Obama signed the order on Monday, the Vatican and U.S. Church leaders condemned the move. One commentator said the test of a real democracy was its defense of the most defenseless.

Obama's executive order reversed and repudiated restrictions placed on the research by his predecessor, George W. Bush, freeing labs across the country to start working with the cells, which can give rise to any kind of cell in the body.

Cardinal Justin Rigali of Philadelphia, chairman of the U.S. Conference of Catholic Bishops' committee on pro-life activities, called Obama's decision a sad victory of politics over science and ethics.

This action is morally wrong because it encourages the destruction of innocent human life, treating vulnerable human beings as mere products to be harvested, he added.

The Catholic Church, other religious groups and pro-life advocates oppose such research -- which scientists hope can lead to cures for diseases such as Alzheimer's and Parkinson's -- because it involves the destruction of embryos.

The Catholic Church supports adult stem cell research, which has made advances in recent years, because it does not involve the destruction of embryos.

An article in the Vatican newspaper L'Osservatore Romano on Tuesday said a real democracy should be founded on protection of human dignity in every phase of its existence.

Separately, Osservatore's editor-in-chief Gian Maria Vian told an Italian newspaper that Obama cannot claim a monopoly on being the Good Samaritan by saying he supports embryonic stem cell research in order to help alleviate human suffering.

Does that mean those who oppose embryonic stem cell research want to prolong human suffering? Vian said.

MONEY OVER MORALS?

Monsignor Elio Sgreccia, a leading Vatican bioethics specialist, told Italian media: The motive for this decision should be seen in the pressure for profits.

After the ban was lifted on Monday, U.S. shares in stem cell research companies soared. Researchers said companies that had been afraid to test the waters would probably leap in now that federal dollars can be used.

The issue will most likely be a main topic at the first meeting between the pope and Obama, expected to take place in July when the president is in Italy for a G8 summit.

In 2001, the late Pope John Paul II urged Bush not to allow stem cell research.

Last year a Vatican bioethics document said the human embryo has from the very beginning, the dignity proper to a person.

Now that Obama has lifted the restrictions, Catholic theologians have been debating how embryonic stem cell research can be made less morally repugnant, in the words of one theologian.

Father Thomas J. Reese, senior fellow at the Woodstock Theological Center of Georgetown University, suggested several ways the Obama administration could find some middle ground.

Reese's suggestions include not creating embryos for the sole purpose of research but instead using only excess embryos produced at fertility clinics that are scheduled to be destroyed anyway.

He also said researchers should show that the research they are doing cannot be done with non-embryonic stem cells, and that research using embryonic stem cells should aim at advancing toward the goal of using only non-embryonic stem cells.

(Editing by Charles Dick)

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