diff --git a/ChangeLog b/ChangeLog
index 04b51af..7d2dbc3 100644
--- a/ChangeLog
+++ b/ChangeLog
@@ -1,3 +1,8 @@
+Sun Mar  7 19:03:48 HKT 2004 William Brack <wbrack@mmm.com.hk>
+
+	* xinclude.c: modified to make sub-includes inherit the
+	  parse flags from the parent document (bug 132597)
+
 Fri Mar  5 01:13:22 CET 2004 Daniel Veillard <daniel@veillard.com>
 
 	* xmlschemas.c: QName handling fixes for the XML Schemas
diff --git a/xinclude.c b/xinclude.c
index 9247632..629c850 100644
--- a/xinclude.c
+++ b/xinclude.c
@@ -694,6 +694,11 @@
 	    newctxt->incTab[i]->count++; /* prevent the recursion from
 					    freeing it */
 	}
+	/*
+	 * The new context should also inherit the Parse Flags
+	 * (bug 132597)
+	 */
+	newctxt->parseFlags = ctxt->parseFlags;
 	xmlXIncludeDoProcess(newctxt, doc, xmlDocGetRootElement(doc));
 	for (i = 0;i < ctxt->incNr;i++) {
 	    newctxt->incTab[i]->count--;