Replacing filename placeholder with file contents in sed

I'm trying to write a basic script to compile HTML file includes. The premise goes like this:

I have 3 files

test.html

<div>
   @include include1.html

   <div>content</div>

   @include include2.html
</div>

include1.html

<span>
   banana
</span>

include2.html

<span>
   apple
</span>

My desired output would be:

output.html

<div>
   <span>
      banana
   </span>

   <div>content</div>

   <span>
      apple
   </span>
</div>

I've tried the following:

sed "s|@include \(.*)|$(cat \1)|" test.html >output.html
This returns cat: 1: No such file or directory
sed "s|@include \(.*)|cat \1|" test.html >output.html
This runs but gives:

output.html
```
<div>
   cat include1.html

   <div>content</div>

   cat include2.html
</div>
```

Any ideas on how to run cat inside sed using group substitution? Or perhaps another solution.

Solution

I wrote this 15-20 years ago to recursively include files and it's included in the article I wrote about how/when to use getline under "Applications" then "d)". I tweaked it now to work with your specific "@include" directive, provide indenting to match the "@include" indentation, and added a safeguard against infinite recursion (e.g. file A includes file B and file B includes file A):

$ cat tst.awk
function read(file,indent) {
    if ( isOpen[file]++ ) {
        print "Infinite recursion detected" | "cat>&2"
        exit 1
    }

    while ( (getline < file) > 0) {
        if ($1 == "@include") {
             match($0,/^[[:space:]]+/)
             read($2,indent substr($0,1,RLENGTH))
        } else {
             print indent $0
        }
    }
    close(file)

    delete isOpen[file]
}

BEGIN{
   read(ARGV[1],"")
   exit
}

$ awk -f tst.awk test.html
<div>
   <span>
      banana
   </span>

   <div>content</div>

   <span>
      apple
   </span>
</div>

Note that if include1.html itself contained a @include ... directive then it'd be honored too, and so on. Look:

$ for i in test.html include?.html; do printf -- '-----\n%s\n' "$i"; cat "$i"; done
-----
test.html
<div>
   @include include1.html

   <div>content</div>

   @include include2.html
</div>
-----
include1.html
<span>
   @include include3.html
</span>
-----
include2.html
<span>
   apple
</span>
-----
include3.html
<div>
   @include include4.html
</div>
-----
include4.html
<span>
   grape
</span>

$ awk -f tst.awk test.html
<div>
   <span>
      <div>
         <span>
            grape
         </span>
      </div>
   </span>

   <div>content</div>

   <span>
      apple
   </span>
</div>

With a non-GNU awk I'd expect it to fail after many levels of recursion with a "too many open files" error so get gawk if you need to go deeper than that or you'd have to write your own file management code.