You declare a variable using xsl:variable

<xsl:variable name="var-name-1">value</xsl:variable>
<xsl:variable name="var-name-2" select="expression"/>

They can be used in attribute value templates and XPath expressions:

<value name="{$value-name}"/>
<xsl:apply-templates select="$somewhere/items"/>

If a variable's value is a node, you can select against it with step expressions.

Variable names follow the same rules as elements:

• They can be QNames (qualified by a namespace).

• Prefixes resolve against the stylesheet document's namespace declarations.