diff --git a/classes/template/TemplateHandler.class.php b/classes/template/TemplateHandler.class.php
index f95d8e0a6..914fdfa1d 100644
--- a/classes/template/TemplateHandler.class.php
+++ b/classes/template/TemplateHandler.class.php
@@ -565,7 +565,7 @@ class TemplateHandler {
 	 **/
 	function _replaceVar($php) {
 		if(!strlen($php)) return '';
-		return preg_replace('@(?<!::|\\\\|\')\$([a-z]|_[a-z0-9])@i', '\$__Context->$1', $php);
+		return preg_replace('@(?<!::|\\\\|(?<!eval\()\')\$([a-z]|_[a-z0-9])@i', '\$__Context->$1', $php);
 	}
 }
 
diff --git a/tests/classes/template/TemplateHandlerTest.php b/tests/classes/template/TemplateHandlerTest.php
index f3a70fa87..29f3950db 100644
--- a/tests/classes/template/TemplateHandlerTest.php
+++ b/tests/classes/template/TemplateHandlerTest.php
@@ -227,6 +227,11 @@ class TemplateHandlerTest extends PHPUnit_Framework_TestCase
 				'<img src="../myxe/xe/img.png" />',
 				'<img src="/xe/tests/classes/myxe/xe/img.png" />'
 			),
+			// issue 696
+			array(
+				'{@ eval(\'$val = $document_srl;\')}',
+				'<?php  eval(\'$__Context->val = $__Context->document_srl;\') ?>'
+			),
 		);
 	}