diff --git a/xml/tests/src/com/intellij/codeInsight/daemon/XmlSimpleHighlightingTest.java b/xml/tests/src/com/intellij/codeInsight/daemon/XmlSimpleHighlightingTest.java
index 0eb9024bf59f..8f764830c251 100644
--- a/xml/tests/src/com/intellij/codeInsight/daemon/XmlSimpleHighlightingTest.java
+++ b/xml/tests/src/com/intellij/codeInsight/daemon/XmlSimpleHighlightingTest.java
@@ -8,9 +8,25 @@ import com.intellij.xml.util.CheckXmlFileWithXercesValidatorInspection;
 public class XmlSimpleHighlightingTest extends LightPlatformCodeInsightFixtureTestCase {
 
   public void testCannotFindDeclaration() {
+    checkValidation("<idea-plugin xmlns:xi=\"http://www.w3.org/2001/XInclude\">\n" +
+                    "</idea-plugin>");
+  }
+
+  public void testUnsupportedIncludeScheme() {
+    checkValidation("<idea-plugin xmlns:xi=\"http://www.w3.org/2001/XInclude\">\n" +
+                    "  <xi:include href=\"extensionPoints.xml\" xpointer=\"xpointer(/extensionPoints/*)\"/>\n" +
+                    "</idea-plugin>");
+  }
+
+  public void testSupportedIncludeScheme() {
+    checkValidation("<idea-plugin xmlns:xi=\"http://www.w3.org/2001/XInclude\">\n" +
+                    "  <<error descr=\"An 'include' failed, and no 'fallback' element was found.\">xi:include</error> href=\"extensionPoints.xml\" xpointer=\"element(/1111)\"/>\n" +
+                    "</idea-plugin>");
+  }
+
+  private void checkValidation(String text) {
     myFixture.enableInspections(CheckXmlFileWithXercesValidatorInspection.class);
-    myFixture.configureByText(XmlFileType.INSTANCE, "<idea-plugin xmlns:xi=\"http://www.w3.org/2001/XInclude\">\n" +
-                                                    "</idea-plugin>");
+    myFixture.configureByText(XmlFileType.INSTANCE, text);
     myFixture.testHighlighting();
   }
 }
diff --git a/xml/xml-psi-impl/src/com/intellij/xml/impl/ExternalDocumentValidator.java b/xml/xml-psi-impl/src/com/intellij/xml/impl/ExternalDocumentValidator.java
index ecc290c7e38e..af25d1dca232 100644
--- a/xml/xml-psi-impl/src/com/intellij/xml/impl/ExternalDocumentValidator.java
+++ b/xml/xml-psi-impl/src/com/intellij/xml/impl/ExternalDocumentValidator.java
@@ -127,6 +127,8 @@ public class ExternalDocumentValidator {
     };
 
     myHandler.setErrorReporter(new ErrorReporter(myHandler) {
+
+      int unsupportedSchemeAt = -1;
       @Override
       public boolean isStopOnUndeclaredResource() {
         return true;
@@ -159,7 +161,7 @@ public class ExternalDocumentValidator {
             if (elementText.equals("</")) {
               currentElement = currentElement.getNextSibling();
             }
-            else if (elementText.equals(">") || elementText.equals("=")) {
+            else if (elementText.equals(">") || elementText.equals("/>") || elementText.equals("=")) {
               currentElement = currentElement.getPrevSibling();
             }
 
@@ -180,7 +182,15 @@ public class ExternalDocumentValidator {
                 // "Cannot find the declaration of element" is not helpful without schema
                 return;
               }
+            } else if ("SchemeUnsupported".equals(messageId)) {
+              unsupportedSchemeAt = offset;
+              return;
+            } else if (unsupportedSchemeAt == offset &&
+                       ("An 'include' failed, and no 'fallback' element was found.".equals(localizedMessage) ||
+                       (e.getLocalizedMessage().startsWith("Include operation failed, reverting to fallback.")))) {
+              return;
             }
+
             if (localizedMessage.startsWith(CANNOT_FIND_DECLARATION_ERROR_PREFIX) ||
                 localizedMessage.startsWith(ELEMENT_ERROR_PREFIX) ||
                 localizedMessage.startsWith(ROOT_ELEMENT_ERROR_PREFIX) ||