Utf8 encoding

Hello,
	I am parsing an xml file using libxml2. The xml file has umlauts(german keys ü/ö/ä etc) , °(degree) atc as the characters.
	Could someone tell me how to encode such an xml to utf8? 

	I get the below error:
	"parser error : Input is not proper UTF-8, indicate encoding !"

	Below is the snippet of code that I used.

	my $parser = "";
	my $doc = "";

	$parser = XML::LibXML->new();#	
	$doc = $parser->parse_file( $x_file );

	I tried to encode using "setEncoding" but no results.

-Shashi