Avendo accesso all'XML, dato che si trova in un file, utilizza il CDATA. Prova così:

Codice PHP:
<?php
$xmlstr 
'
<urls>
    <url><![CDATA[http://www.XXX.it/engine/accommodationXmlSearch/selection?language=es&website=ES&destinationLocation=Barcelona&destinationLocationGeoNodeId=9646&checkInDate=20110725&checkOutDate=20110726&numberOfRooms=2&numberOfAdultsRoom1=1&numberOfChildrenRoom1=1&room1Child1Age=1&numberOfAdultsRoom2=1&numberOfChildrenRoom2=2&room2Child1Age=1&room2Child2Age=2&mktportal=metasearch&utm_medium=affiliates&utm_source=tradedoubler&utm_campaign=url-meta-search&hotelGroupId=19659&hotelId=36595053]]></url>
</urls>
'
;

$xml simplexml_load_string($xmlstr);

foreach(
$xml->url as $url) {
    echo 
$url;
}
?>