Variable with node list...

I get the following error from Microsoft's parser when processing the
included document and stylesheet.

  Reference to variable or parameter 'properties' must evaluate to a node
list.

Has anyone else run across this? (MSXML3, IE6, Windows 2000 Server)

vartree.xml
-----------
<?xml version="1.0"  encoding="UTF-8" ?>
<?xml-stylesheet type="text/xsl" href="vartree.xsl"?>
<root></root>

vartree.xsl
-----------
<?xml version="1.0" encoding="UTF-8" ?>
<xsl:stylesheet version="1.0"
xmlns:xsl="http://www.w3.org/1999/XSL/Transform">
  <xsl:template match="root">
    <xsl:variable name="properties">
      <property>one</property>
      <property>two</property>
      <property>three</property>
    </xsl:variable>
    <foo>
      <xsl:for-each select="$properties/property">
        <bar>
          <xsl:value-of select="."/>
        </bar>
      </xsl:for-each>
    </foo>
  </xsl:template>
</xsl:stylesheet>


 XSL-List info and archive:  http://www.mulberrytech.com/xsl/xsl-list