diff --git a/Smarty.class.php b/Smarty.class.php
index c87109f6..b6c2524b 100644
--- a/Smarty.class.php
+++ b/Smarty.class.php
@@ -696,10 +696,10 @@ class Smarty
     Function:   _smarty_include()
     Purpose:    called for included templates
 \*======================================================================*/
-    function _smarty_include($_smarty_include_tpl_file ,$_smarty_def_vars,
-                             $_smarty_include_vars, &$_smarty_config_parent)
+    function _smarty_include($_smarty_include_tpl_file, $_smarty_include_vars,
+                             &$_smarty_config_parent)
     {
-        extract($_smarty_def_vars);
+        $this->_tpl_vars = array_merge($this->_tpl_vars, $_smarty_include_vars);
         extract($_smarty_include_vars);
                 
         $this->_process_template($_smarty_include_tpl_file, $compile_path);
diff --git a/Smarty_Compiler.class.php b/Smarty_Compiler.class.php
index fd8d9c7d..885e2244 100644
--- a/Smarty_Compiler.class.php
+++ b/Smarty_Compiler.class.php
@@ -363,7 +363,9 @@ class Smarty_Compiler extends Smarty {
 
 		foreach ($attrs as $arg_name => $arg_value) {
 			if ($arg_name == 'file') {
-                $_smarty_include_tpl_file = $arg_value;
+                $_smarty_include_tpl_file = $this->_dequote($arg_value);
+				if ($_smarty_include_tpl_file{0} != '$')
+					$_smarty_include_tpl_file = '"' . $_smarty_include_tpl_file . '"';
                 continue;
             }
 			if (is_bool($arg_value))
@@ -372,11 +374,12 @@ class Smarty_Compiler extends Smarty {
 		}
 
 		return  "<?php " .
-			"\$_smarty_defined_vars = get_defined_vars();\n" .
+			"\$_smarty_tpl_vars = \$this->_tpl_vars;\n" .
 			"unset(\$_smarty_defined_vars['_smarty_include_tpl_file']);\n" .
-			"unset(\$_smarty_defined_vars['_smarty_def_vars']);\n" .
 			"unset(\$_smarty_defined_vars['_smarty_include_vars']);\n" .
-			"\$this->_smarty_include(".$_smarty_include_tpl_file.", \$_smarty_defined_vars, array(".implode(',', (array)$arg_list)."), \$_smarty_config);\n?>";
+			"\$this->_smarty_include(".$_smarty_include_tpl_file.", array(".implode(',', (array)$arg_list)."), \$_smarty_config);\n" .
+			"\$this->_tpl_vars = \$_smarty_defined_vars;\n" .
+			"unset(\$_smarty_tpl_vars); ?>";
     }
 
 /*======================================================================*\
diff --git a/libs/Smarty.class.php b/libs/Smarty.class.php
index c87109f6..b6c2524b 100644
--- a/libs/Smarty.class.php
+++ b/libs/Smarty.class.php
@@ -696,10 +696,10 @@ class Smarty
     Function:   _smarty_include()
     Purpose:    called for included templates
 \*======================================================================*/
-    function _smarty_include($_smarty_include_tpl_file ,$_smarty_def_vars,
-                             $_smarty_include_vars, &$_smarty_config_parent)
+    function _smarty_include($_smarty_include_tpl_file, $_smarty_include_vars,
+                             &$_smarty_config_parent)
     {
-        extract($_smarty_def_vars);
+        $this->_tpl_vars = array_merge($this->_tpl_vars, $_smarty_include_vars);
         extract($_smarty_include_vars);
                 
         $this->_process_template($_smarty_include_tpl_file, $compile_path);
diff --git a/libs/Smarty_Compiler.class.php b/libs/Smarty_Compiler.class.php
index fd8d9c7d..885e2244 100644
--- a/libs/Smarty_Compiler.class.php
+++ b/libs/Smarty_Compiler.class.php
@@ -363,7 +363,9 @@ class Smarty_Compiler extends Smarty {
 
 		foreach ($attrs as $arg_name => $arg_value) {
 			if ($arg_name == 'file') {
-                $_smarty_include_tpl_file = $arg_value;
+                $_smarty_include_tpl_file = $this->_dequote($arg_value);
+				if ($_smarty_include_tpl_file{0} != '$')
+					$_smarty_include_tpl_file = '"' . $_smarty_include_tpl_file . '"';
                 continue;
             }
 			if (is_bool($arg_value))
@@ -372,11 +374,12 @@ class Smarty_Compiler extends Smarty {
 		}
 
 		return  "<?php " .
-			"\$_smarty_defined_vars = get_defined_vars();\n" .
+			"\$_smarty_tpl_vars = \$this->_tpl_vars;\n" .
 			"unset(\$_smarty_defined_vars['_smarty_include_tpl_file']);\n" .
-			"unset(\$_smarty_defined_vars['_smarty_def_vars']);\n" .
 			"unset(\$_smarty_defined_vars['_smarty_include_vars']);\n" .
-			"\$this->_smarty_include(".$_smarty_include_tpl_file.", \$_smarty_defined_vars, array(".implode(',', (array)$arg_list)."), \$_smarty_config);\n?>";
+			"\$this->_smarty_include(".$_smarty_include_tpl_file.", array(".implode(',', (array)$arg_list)."), \$_smarty_config);\n" .
+			"\$this->_tpl_vars = \$_smarty_defined_vars;\n" .
+			"unset(\$_smarty_tpl_vars); ?>";
     }
 
 /*======================================================================*\