xsl:strip-space does not work?

I am using a  xml file which looks like, the following ( I have removed
insignificant text to improve readability)

?xml version="1.0"?>
<Catalog id="C31">
<object uri="http://developler.com/classdef;132">
	<property uri="http://developer.com/propertyType;193">
		1698.0||
	</property
</object>
</Catalog>

I want to parse it using the following XSL

<?xml version="1.0" ?>
<!-- Passes a node set from one template to another -->
<xsl:stylesheet xmlns:xsl="http://www.w3.org/1999/XSL/Transform"
    version="1.0">
    <xsl:strip-space elements="*" />
    <xsl:output method="xml" indent="yes" />
	<xsl:template match="object" >
	        <PRODUCT_ITEM >
            	<PRICE>
	                <xsl:value-of select="property/@uri"/>
            	</PRICE>
	</xsl:template>
</xsl:stylesheet>

The out put looks like this

<PRODUCT_ITEM>
<PRICE>
		1698.0||
	</PRICE>
</PRODUCT_ITEM>

I don't know why xsl:strip does not strip out the whitespaces around PRICE
tag.  I can use normalize-space() to make it work but that would be a hack.
I guess, xsl:strip=space should work, or am I using it incorrectly?

Any help would be much appreciated,
thanx
Nisheet

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