Q: are entities containing markup allowed in attribute values?

Are entities containing mark-up allowed in attribute values? 

For example, is the following document well-formed?

<?xml version="1.0"?>
<!DOCTYPE message [
<!ENTITY greet "<greeting>Hi</greeting>">
]>
<!--Atribute value has an entity reference: &greet; which contains mark-up! -->
<message value="&greet;"/>

If not, can somebody point out where in the XML 1.0 spec this is mandated?

Many thanks
Rob Lugt
Elcel Technology