from xml.etree import ElementTree
from io import StringIO
testf = StringIO('<foo>&moo_1;</foo>')
parser = ElementTree.XMLParser()
parser.parser.UseForeignDTD(True)
parser.entity['moo_1'] = 'MOOOOO'
etree = ElementTree.ElementTree()
tree = etree.parse(testf, parser=parser)
for node in tree.iter('foo'):
    pass
Поддержка Python ElementTree для анализа неизвестных объектов XML?