Unicode and attribute URI values?

[Jon Noring <jon@noring.name>]

As part of designing a digital publication open standard (OpenReader),
we're now discussing the issue of allowed characters within URI
attribute values in UTF-8 encoded XML documents.

Reading XML 1.0 and RFC 3986, it is not at all clear (at least to me)
what is allowed, or how much leeway exists. Specifically, when the
attribute URI value includes non-ASCII characters (e.g., Greek
characters), must these non-ASCII characters be percent-encoded in the
attribute value (effectively "ascii-zing" the attribute value), or can
the characters be kept natively encoded in the attribute value per the
text encoding of the document?

I guess this issue comes under the moniker "International URIs".

Thanks.

Jon Noring