<xsd:schema>
       <xsl:variable name="rtf">

<xsl:for-each select="document('nmspaces')/namespaces/namespace">
           <xsl:attribute na

That should have generate an error you need to have an element to hold
the attribute (and namespace) nodes, you can't just generate them under
the / node of the variable.

 <xsl:copy-of select="xalan:nodeset($rtf)/*/namespace::*

That will generate nothing as xalan:nodeset($rtf)/* is the empty set
as there is no element.

David

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