String replace all with XSL

string-replace-all.xsl

<?xml version="1.0" encoding="UTF-8"?>
<xsl:stylesheet version="1.0"
	xmlns:xsl="http://www.w3.org/1999/XSL/Transform">

	<xsl:template name="string-replace-all">
		<xsl:param name="text" />
		<xsl:param name="replace" />
		<xsl:param name="by" />
		<xsl:choose>
			<xsl:when test="contains($text, $replace)">
				<xsl:value-of select="substring-before($text,$replace)" />
				<xsl:value-of select="$by" />
				<xsl:call-template name="string-replace-all">
					<xsl:with-param name="text"
						select="substring-after($text,$replace)" />
					<xsl:with-param name="replace" select="$replace" />
					<xsl:with-param name="by" select="$by" />
				</xsl:call-template>
			</xsl:when>
			<xsl:otherwise>
				<xsl:value-of select="$text" />
			</xsl:otherwise>
		</xsl:choose>
	</xsl:template>

	<!-- template call -->

	<xsl:variable name="result">
		<xsl:call-template name="string-replace-all">
			<xsl:with-param name="text" select="Text to %REPLACE%" />
			<xsl:with-param name="replace" select="'%REPLACE%'" />
			<xsl:with-param name="by" select="'replace'" />
		</xsl:call-template>
	</xsl:variable>

</xsl:stylesheet>