grab_nodes_osm.bz2_file.py

from lxml import etree as et
from bz2file import BZ2File
from lxml.etree import tostring

path = "<path-to-osm.bz2-dir>/planet.osm.bz2"
path_nodes = "<path-to-osm.bz2-dir>/planet_nodes.osm"

str = '';
with BZ2File(path) as xml_file:
    with open(path_nodes, 'w') as f:
        f.write("<?xml version=\"1.0\" encoding=\"UTF-8\"?>")
        f.write("<osm>")
        parser = et.iterparse(xml_file, events=('end',))
        for events, elem in parser:
            if elem.tag == "node":
                str = str + tostring(elem);
        f.write(str)
        f.write("</osm>")

Write event is taking place, now, only once for all the looped elements.