Entity declarations in XML

Hi all,

How do you include ENTITY declarations in  an XML schema in the sam way as
you would include it in a DTD like :
<!ENTITY % ISOdia SYSTEM "ISO-DIA.ENT">
%ISOdia;
Could anybody give me the corresponding representation of this in a schema ?
Infact I am facing a problem where I need to insert data in some XML tags
wherein the data may contain "&" symbols.
When they are inserted as is without being replaced by &amp; it gives me a
validation error.
I beleive making an entity declaration could be a workaround.
Could somebody throw light on this ???

Thanks in advance
Seema