auml and xml

[Jaak]

Hi!

I have a xml file 
test.xml
---
<?xml version="1.0" encoding="ISO-8859-1"?>
<row>&auml;</row>
---

and test2.xml
---
<?xml version="1.0" encoding="ISO-8859-1"?>
<row>ä</row>
---

While processing  test.xml with EmbperlLibXSLT
test.xml returns an error 
[2439]ERR: 58: test.epl(1): LibXSLT Error: Entity 'auml' not defined:
[2439]ERR: 58: test.epl(1): LibXSLT Error: &auml;:

test2.xml works ok.

In test.xsl I have:

<!DOCTYPE xsl:stylesheet [
    <!ENTITY % XHTMLlat1 SYSTEM "/path/to/xhtml-lat1.ent">
   %XHTMLlat1;  
]>

Inside  test.xsl &auml; works OK.

What am I doing wrong?

Embperl was compiled from the CVS (about 2 weeks ago).

TIA


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