diff --git a/src/ng/compile.js b/src/ng/compile.js
index f0b7ba9e5952..84432647fe01 100644
--- a/src/ng/compile.js
+++ b/src/ng/compile.js
@@ -1717,33 +1717,37 @@ function $CompileProvider($provide) {
       }
 
       directives.push({
-        priority: -100,
-        compile: valueFn(function attrInterpolateLinkFn(scope, element, attr) {
-          var $$observers = (attr.$$observers || (attr.$$observers = {}));
-
-          if (EVENT_HANDLER_ATTR_REGEXP.test(name)) {
-            throw $compileMinErr('nodomevents',
-                "Interpolations for HTML DOM event attributes are disallowed.  Please use the " +
-                "ng- versions (such as ng-click instead of onclick) instead.");
-          }
+        priority: 100,
+        compile: function() {
+            return {
+              pre: function attrInterpolatePreLinkFn(scope, element, attr) {
+                var $$observers = (attr.$$observers || (attr.$$observers = {}));
+
+                if (EVENT_HANDLER_ATTR_REGEXP.test(name)) {
+                  throw $compileMinErr('nodomevents',
+                      "Interpolations for HTML DOM event attributes are disallowed.  Please use the " +
+                          "ng- versions (such as ng-click instead of onclick) instead.");
+                }
 
-          // we need to interpolate again, in case the attribute value has been updated
-          // (e.g. by another directive's compile function)
-          interpolateFn = $interpolate(attr[name], true, getTrustedContext(node, name));
-
-          // if attribute was updated so that there is no interpolation going on we don't want to
-          // register any observers
-          if (!interpolateFn) return;
-
-          // TODO(i): this should likely be attr.$set(name, iterpolateFn(scope) so that we reset the
-          // actual attr value
-          attr[name] = interpolateFn(scope);
-          ($$observers[name] || ($$observers[name] = [])).$$inter = true;
-          (attr.$$observers && attr.$$observers[name].$$scope || scope).
-            $watch(interpolateFn, function interpolateFnWatchAction(value) {
-              attr.$set(name, value);
-            });
-        })
+                // we need to interpolate again, in case the attribute value has been updated
+                // (e.g. by another directive's compile function)
+                interpolateFn = $interpolate(attr[name], true, getTrustedContext(node, name));
+
+                // if attribute was updated so that there is no interpolation going on we don't want to
+                // register any observers
+                if (!interpolateFn) return;
+
+                // TODO(i): this should likely be attr.$set(name, iterpolateFn(scope) so that we reset the
+                // actual attr value
+                attr[name] = interpolateFn(scope);
+                ($$observers[name] || ($$observers[name] = [])).$$inter = true;
+                (attr.$$observers && attr.$$observers[name].$$scope || scope).
+                    $watch(interpolateFn, function interpolateFnWatchAction(value) {
+                      attr.$set(name, value);
+                    });
+              }
+            };
+          }
       });
     }
 
diff --git a/test/ng/compileSpec.js b/test/ng/compileSpec.js
index 0bba6b3737ab..72165b7ee67c 100755
--- a/test/ng/compileSpec.js
+++ b/test/ng/compileSpec.js
@@ -1591,7 +1591,7 @@ describe('$compile', function() {
     );
 
 
-    it('should process attribute interpolation at the beginning of the post-linking phase', function() {
+    it('should process attribute interpolation in pre-linking phase at priority 100', function() {
       module(function() {
         directive('attrLog', function(log) {
           return {
@@ -1600,22 +1600,36 @@ describe('$compile', function() {
 
               return {
                 pre: function($scope, $element, $attrs) {
-                  log('preLink=' + $attrs.myName);
+                  log('preLinkP0=' + $attrs.myName);
                 },
-                post: function($scope, $element) {
+                post: function($scope, $element, $attrs) {
                   log('postLink=' + $attrs.myName);
                 }
               }
             }
           }
-        })
+        });
+      });
+      module(function() {
+        directive('attrLogHighPriority', function(log) {
+          return {
+            priority: 101,
+            compile: function() {
+              return {
+                pre: function($scope, $element, $attrs) {
+                  log('preLinkP101=' + $attrs.myName);
+                }
+              };
+            }
+          }
+        });
       });
       inject(function($rootScope, $compile, log) {
-        element = $compile('<div attr-log my-name="{{name}}"></div>')($rootScope);
+        element = $compile('<div attr-log-high-priority attr-log my-name="{{name}}"></div>')($rootScope);
         $rootScope.name = 'angular';
         $rootScope.$apply();
         log('digest=' + element.attr('my-name'));
-        expect(log).toEqual('compile={{name}}; preLink={{name}}; postLink=; digest=angular');
+        expect(log).toEqual('compile={{name}}; preLinkP101={{name}}; preLinkP0=; postLink=; digest=angular');
       });
     });
 
@@ -1758,6 +1772,32 @@ describe('$compile', function() {
         expect(element.text()).toBe('AHOJ|ahoj|AHOJ');
       });
     });
+
+
+    it('should make attributes observable for terminal directives', function() {
+      module(function() {
+        directive('myAttr', function(log) {
+          return {
+            terminal: true,
+            link: function(scope, element, attrs) {
+              attrs.$observe('myAttr', function(val) {
+                log(val);
+              });
+            }
+          }
+        });
+      });
+
+      inject(function($compile, $rootScope, log) {
+        element = $compile('<div my-attr="{{myVal}}"></div>')($rootScope);
+        expect(log).toEqual([]);
+
+        $rootScope.myVal = 'carrot';
+        $rootScope.$digest();
+
+        expect(log).toEqual(['carrot']);
+      });
+    })
   });