How can I escape XML field in XML-output query?
The naive approach would be to wrap your query around another SELECT and use replace.

SELECT replace(
    (SELECT XMLAGG(data) FROM
         (SELECT XMLELEMENT(name item, XMLFOREST(
          title,
          body as description,
          date_created as date,
          'http://example.com/news'||id as link 
         )
     ) AS data FROM NEWS) AS smthng)::text, '&lt;', '&amp;lt;')


And do the same for &gt;. A easier and more elgant mthod would be to to it with the language that should deliver/process/... the XML.