RubyOnRails syntax-parser error

Our developer team has found duch bug in RubyOnRails 1.2.3:

app/controllers/test_controller.rb

class TestController < ApplicationController
def index
str = “Ï” # here “o” is russian-symbol in encoding “KOI8-R”

render :text => 'This is test controller.'

end
end

http://mydomain/test/

SyntaxError in TestController#index

/sites/rails/vadim/app/controllers/test_controller.rb:3: unterminated
string meets end of file
/sites/rails/vadim/app/controllers/test_controller.rb:3: parse error,
unexpected $, expecting kEND

/usr/local/lib/ruby/gems/1.8/gems/activesupport-1.4.2/lib/
active_support/dependencies.rb:203:in
load_without_new_constant_marking' /usr/local/lib/ruby/gems/1.8/gems/activesupport-1.4.2/lib/ active_support/dependencies.rb:203:in load_file’
/usr/local/lib/ruby/gems/1.8/gems/activesupport-1.4.2/lib/
active_support/dependencies.rb:342:in new_constants_in' /usr/local/lib/ruby/gems/1.8/gems/activesupport-1.4.2/lib/ active_support/dependencies.rb:202:in load_file’
/usr/local/lib/ruby/gems/1.8/gems/activesupport-1.4.2/lib/
active_support/dependencies.rb:94:in require_or_load' /usr/local/lib/ruby/gems/1.8/gems/activesupport-1.4.2/lib/ active_support/dependencies.rb:248:in load_missing_constant’
/usr/local/lib/ruby/gems/1.8/gems/activesupport-1.4.2/lib/
active_support/dependencies.rb:452:in const_missing' /usr/local/lib/ruby/gems/1.8/gems/activesupport-1.4.2/lib/ active_support/dependencies.rb:464:in const_missing’
/usr/local/lib/ruby/gems/1.8/gems/activesupport-1.4.2/lib/
active_support/inflector.rb:250:in constantize' /usr/local/lib/ruby/gems/1.8/gems/activesupport-1.4.2/lib/ active_support/core_ext/string/inflections.rb:148:in constantize’
/usr/local/lib/ruby/gems/1.8/gems/actionpack-1.13.3/lib/
action_controller/routing.rb:1290:in recognize' /usr/local/lib/ruby/gems/1.8/gems/rails-1.2.3/lib/dispatcher.rb:46:in dispatch’
/sites/rails/vadim/public/dispatch.cgi:10

Many russian words work.

Important: In RubyOnRails 1.1.6 this code works. All is OK!