Read xml from bz2

demo.py

from lxml import etree as et
from bz2file import BZ2File

path = "where/my/fileis.osm.bz2"
with BZ2File(path) as xml_file:
    parser = et.iterparse(xml_file, events=('end',))
    for events, elem in parser:

        if elem.tag == "tag":
            continue
        if elem.tag == "node":
            (do something)


    ## Do some cleaning
    # Get rid of that element
    elem.clear()

    # Also eliminate now-empty references from the root node to node        
    while elem.getprevious() is not None:
        del elem.getparent()[0]