diff --git a/src/xslt/xslt.ts b/src/xslt/xslt.ts
index 9b6a090..173c6a9 100644
--- a/src/xslt/xslt.ts
+++ b/src/xslt/xslt.ts
@@ -1332,10 +1332,13 @@ export class Xslt {
 
         // node.transformedNodeName = name;
 
+        // Fix for Issue 161: Set siblingPosition to preserve document order
+        node.siblingPosition = (output || this.outputDocument).childNodes.length;
+
         domAppendChild(output || this.outputDocument, node);
         // The element becomes the output node of the source node.
         // context.nodeList[context.position].outputNode = node;
-        const clonedContext = context.clone(undefined, 0);
+        const clonedContext = context.clone();
         await this.xsltChildNodes(clonedContext, template, node);
     }
 
diff --git a/tests/gh_issues_160_161.test.tsx b/tests/gh_issues_160_161.test.tsx
new file mode 100644
index 0000000..66f3917
--- /dev/null
+++ b/tests/gh_issues_160_161.test.tsx
@@ -0,0 +1,74 @@
+/* eslint-disable no-undef */
+import assert from 'assert';
+
+import { Xslt } from '../src/xslt';
+import { XmlParser } from '../src/dom';
+
+describe('Issues 160 and 161', () => {
+    
+    // Issue 160
+    it('Issue 160: xsl:element inside for-each should use correct context node', async () => {
+        const xmlString = `
+        <data>
+            <item id="1">Item 1</item>
+            <item id="2">Item 2</item>
+        </data>`;
+
+        const xsltString = `
+        <xsl:stylesheet version="1.0" xmlns:xsl="http://www.w3.org/1999/XSL/Transform">
+            <xsl:template match="/">
+                <root>
+                    <xsl:for-each select="data/item">
+                        <xsl:element name="row">
+                            <xsl:value-of select="."/>
+                        </xsl:element>
+                    </xsl:for-each>
+                </root>
+            </xsl:template>
+        </xsl:stylesheet>`;
+
+        const expectedOutString = `<root><row>Item 1</row><row>Item 2</row></root>`;
+
+        const xsltClass = new Xslt();
+        const xmlParser = new XmlParser();
+        const xml = xmlParser.xmlParse(xmlString);
+        const xslt = xmlParser.xmlParse(xsltString);
+        const outXmlString = await xsltClass.xsltProcess(xml, xslt);
+        
+        // Normalize whitespace for comparison if needed, but for now exact match
+        assert.equal(outXmlString.replace(/\s+/g, ''), expectedOutString.replace(/\s+/g, ''));
+    });
+
+    // Issue 161
+    it('Issue 161: Mixing xsl:element and literal tags should preserve order', async () => {
+        const xmlString = `
+        <data>
+            <item id="1">Item 1</item>
+            <item id="2">Item 2</item>
+        </data>`;
+
+        const xsltString = `
+        <xsl:stylesheet version="1.0" xmlns:xsl="http://www.w3.org/1999/XSL/Transform">
+            <xsl:template match="/">
+                <root>
+                    <xsl:for-each select="data/item">
+                        <xsl:element name="generated">Gen <xsl:value-of select="@id"/></xsl:element>
+                        <literal>Lit <xsl:value-of select="@id"/></literal>
+                    </xsl:for-each>
+                </root>
+            </xsl:template>
+        </xsl:stylesheet>`;
+
+        // Expected: Interleaved
+        const expectedOutString = `<root><generated>Gen 1</generated><literal>Lit 1</literal><generated>Gen 2</generated><literal>Lit 2</literal></root>`;
+
+        const xsltClass = new Xslt();
+        const xmlParser = new XmlParser();
+        const xml = xmlParser.xmlParse(xmlString);
+        const xslt = xmlParser.xmlParse(xsltString);
+        const outXmlString = await xsltClass.xsltProcess(xml, xslt);
+        
+        // console.log('Issue 161 Output:', outXmlString);
+        assert.equal(outXmlString.replace(/\s+/g, ''), expectedOutString.replace(/\s+/g, ''));
+    });
+});