diff --git a/.gitignore b/.gitignore
index e2cec12..54a9c34 100644
--- a/.gitignore
+++ b/.gitignore
@@ -1,3 +1,4 @@
 haml-2.2.24.gem
 haml-3.0.17.gem
 /haml-3.0.25.gem
+/haml-3.1.2.gem
diff --git a/haml-issue-403-bugfix.patch b/haml-issue-403-bugfix.patch
new file mode 100644
index 0000000..6660d09
--- /dev/null
+++ b/haml-issue-403-bugfix.patch
@@ -0,0 +1,45 @@
+--- lib/haml/helpers/action_view_mods.rb.orig	2011-07-12 14:20:20.000000000 -0400
++++ lib/haml/helpers/action_view_mods.rb	2011-07-12 14:21:14.000000000 -0400
+@@ -51,10 +51,7 @@ module ActionView
+           # We've got to do the same thing for compatibility.
+ 
+           if is_haml? && block_is_haml?(block)
+-            value = nil
+-            buffer = capture_haml(*args) { value = yield(*args) }
+-            return buffer unless buffer.empty?
+-            return value if value.is_a?(String)
++            capture_haml(*args, &block)
+           else
+             capture_without_haml(*args, &block)
+           end
+@@ -88,16 +85,7 @@ module ActionView
+       module CaptureHelper
+         def capture_with_haml(*args, &block)
+           if Haml::Helpers.block_is_haml?(block)
+-            value = nil
+-            buffer = capture_haml(*args) { value = yield(*args) }
+-            str =
+-              if !buffer.empty?
+-                buffer
+-              elsif value.is_a?(String)
+-                value
+-              else
+-                ''
+-              end
++            str = capture_haml(*args, &block)
+             return ActionView::NonConcattingString.new(str) if defined?(ActionView::NonConcattingString)
+             return str
+           else
+--- test/haml/helper_test.rb.orig	2011-07-12 14:21:25.000000000 -0400
++++ test/haml/helper_test.rb	2011-07-12 14:21:31.000000000 -0400
+@@ -357,10 +357,6 @@ HAML
+     assert_equal("1\n\n2\n\n3\n\n", render("- trc([1, 2, 3]) do |i|\n  = i.inspect"))
+   end
+ 
+-  def test_capture_with_string_block
+-    assert_equal("foo\n", render("= capture { 'foo' }", :action_view))
+-  end
+-
+   def test_find_and_preserve_with_block
+     assert_equal("<pre>Foo&#x000A;Bar</pre>\nFoo\nBar\n",
+                  render("= find_and_preserve do\n  %pre\n    Foo\n    Bar\n  Foo\n  Bar"))
diff --git a/rubygem-haml.spec b/rubygem-haml.spec
index a5a54f6..a36a8ee 100644
--- a/rubygem-haml.spec
+++ b/rubygem-haml.spec
@@ -5,13 +5,15 @@
 
 Summary: An elegant, structured XHTML/XML templating engine
 Name: rubygem-%{gemname}
-Version: 3.0.25
+Version: 3.1.2
 Release: 1%{?dist}
 Group: Development/Languages
 License: MIT and WTFPL
 URL: http://haml-lang.com/
-Source0: http://gems.rubyforge.org/gems/%{gemname}-%{version}.gem
-BuildRoot: %{_tmppath}/%{name}-%{version}-%{release}-root-%(%{__id_u} -n)
+Source0: http://rubygems.org/gems/%{gemname}-%{version}.gem
+
+# interim fix for https://github.com/nex3/haml/issues/403
+Patch0: haml-issue-403-bugfix.patch
 
 Requires: rubygems
 Requires: ruby(abi) = 1.8
@@ -42,6 +44,14 @@ function as a stand-alone templating engine.
 
 
 %prep
+%setup -q -c -T
+%{__mkdir_p} .%{gemdir}
+gem install --local --install-dir .%{gemdir} \
+            --force -V --rdoc %{SOURCE0}
+
+pushd .%{geminstdir}
+%patch0
+popd
 
 %build
 
@@ -60,10 +70,9 @@ done
 popd
 
 %install
-rm -rf %{buildroot}
 mkdir -p %{buildroot}%{gemdir}
-gem install --local --install-dir %{buildroot}%{gemdir} \
-            --force --rdoc %{SOURCE0}
+mv .%{gemdir}/* %{buildroot}%{gemdir}
+
 mkdir -p %{buildroot}/%{_bindir}
 mv %{buildroot}%{gemdir}/bin/* %{buildroot}/%{_bindir}
 rmdir %{buildroot}%{gemdir}/bin
@@ -91,16 +100,10 @@ find %{buildroot}/%{geminstdir} -type f ! -perm /go+r -exec chmod -v go+r {} \;
 find %{buildroot}%{geminstdir}/bin -type f | \
   xargs -n 1 sed -i -e 's"^#!/usr/bin/env ruby"#!/usr/bin/ruby"'
 
-%clean
-rm -rf %{buildroot}
-
 %files
 %defattr(-, root, root, -)
 %{_bindir}/haml
 %{_bindir}/html2haml
-%{_bindir}/sass
-%{_bindir}/css2sass
-%{_bindir}/sass-convert
 %dir %{geminstdir}
 %{geminstdir}/Rakefile
 %{geminstdir}/bin
@@ -123,6 +126,9 @@ rm -rf %{buildroot}
 
 
 %changelog
+* Mon Jul 11 2011 Mo Morsi <mmorsi@redhat.com> - 3.1.2-1
+- updated to latest upstream release
+
 * Tue Mar 29 2011 Mo Morsi <mmorsi@redhat.com> - 3.0.25-1
 - updated to latest upstream release
 
diff --git a/sources b/sources
index f20612f..e6fcf68 100644
--- a/sources
+++ b/sources
@@ -1 +1 @@
-88da935b08a8458d453a65da1a93f4de  haml-3.0.25.gem
+f702720d62ec4138827abb1533f885ba  haml-3.1.2.gem