url encoding of ampersands

Greetings all. Here's a problem I'm working on:

Description: 
A link is pointing to an anchor, whose name contains an
accented character. The URL is constructed based on a text node in the
XML to avoid using special characters in an attribute. Next, the
stylesheet needs to replace all ampersands with %26 for URL
encoding. 

Example:

XML:
<link type="anchor">Cr&#233;pe</link>

Expected result:
<a href="#Cr%26#233;pe">Cr&#233;pe</a>

Template:
<xsl:template match="link">
  <xsl:variable name="anchor" select="concat(substring-before( . ,
'&amp;'), '%26', substring-after( . , '#'))"/>

...

</xsl:template>

Actual result:  
I am unable to match on the ampersands using contains() or
substring functions, but can see them in the result tree, as the entity
has transformed into &eacute;. 

I tried various combinations of CDATA, disable-output-escaping, and
others which I can't describe clearly here. translate() can see the
ampersands, but I can't think of a way of using it here.

Help will be greatly appreciated.

Sivan


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