An external parsed general entity reference is declared in the DTD using an ENTITY declaration. However, instead of the actual replacement text, the SYSTEM keyword and a URI to the replacement text is given. For example:

<!ENTITY footer SYSTEM "http://www.oreilly.com/boilerplate/footer.xml">

Of course, a relative URL will often be used instead. For example:

<!ENTITY footer SYSTEM "/boilerplate/footer.xml">

In either case when the general entity reference &footer; is seen in the character data of an element, the parser may replace it with the document found at http://www.oreilly.com/boilerplate/footer.xml. References to external parsed entities are not allowed in attribute values. Most of the time, this shouldn't be too big a hassle because attribute values tend to be small enough to be easily included in internal entities.

Notice we wrote that the parser may replace the entity reference with the document at the URL, not that it must. This is an area where parsers have some leeway in just how much of the XML specification they wish to implement. A validating parser must retrieve such an external entity. However, a nonvalidating parser may or may not choose to retrieve the entity.

Furthermore, not all text files can serve as external entities. In order to be loaded in by a general entity reference, the document must be potentially well-formed when inserted into an existing document. This does not mean the external entity itself must be well-formed. In particular, the external entity might not have a single root element. However, if such a root element were wrapped around the external entity, then the resulting document should be well-formed. This means, for example, that all elements that start inside the entity must finish inside the same entity. They cannot finish inside some other entity. Furthermore, the external entity does not have a prolog and, therefore, cannot have an XML declaration or a document type declaration.