Creating dynamic FM variables using XSLT

Hello,

I have a problem which I have not found any solutions to yet.

I have an XML file that looks like this

<root>
<firstelement>
<text>content</text>
<description>content</description>
<secondelement>
<text><variable>variable</variable>content</text>
<description>
</secondelement>
</firstelement>
</root>

I wrote an XSLT to transform this into a flat hierarchy so I can display it as table. My problem is that I may be too inexperienced with XSLT or my googlefu is not strong enough but I haven't found a way to transform the <variable> elements & their content into <!ENTITY> elements.

Is it even possible to do this with XSLT?

Thank you for any help.