Zend_Config_XML encoding issue

Answer 1

You should not be using HTML Entities in XML. Using normal UTF-8 characters should be fine.

The occurrence of Osnabrück means that at some point, most likely, the city name is processed as ISO-8859-1 instead of UTF-8. It is not htmlentities()'s fault. You need to find that point and fix it.

Answer 2

You can use iconv() function to convert to utf-8 dynamicaly.

iconv("ISO-8859-1", "UTF-8", $text);