diff --git a/src/ng/directive/booleanAttrDirs.js b/src/ng/directive/booleanAttrDirs.js
index f0182610aa5e..01134998e2a4 100644
--- a/src/ng/directive/booleanAttrDirs.js
+++ b/src/ng/directive/booleanAttrDirs.js
@@ -302,13 +302,21 @@ forEach(['src', 'href'], function(attrName) {
   var normalized = directiveNormalize('ng-' + attrName);
   ngAttributeAliasDirectives[normalized] = function() {
     return {
-      priority: 100,
+      priority: 99, // it needs to run after the attributes are interpolated
       compile: function(tpl, attr) {
         return function(scope, element, attr) {
-          attr.$$observers[attrName] = [];
-          attr.$observe(normalized, function(value) {
+          var value = attr[normalized];
+          if (value == undefined) {
+            // undefined value means that the directive is being interpolated
+            // so just register observer
+            attr.$$observers[attrName] = [];
+            attr.$observe(normalized, function(value) {
+              attr.$set(attrName, value);
+            });
+          } else {
+            // value present means that no interpolation, so copy to native attribute.
             attr.$set(attrName, value);
-          });
+          }
         };
       }
     };
diff --git a/test/ng/directive/booleanAttrDirSpecs.js b/test/ng/directive/booleanAttrDirSpecs.js
index 7a4244a8f74e..aa84c1aed1bb 100644
--- a/test/ng/directive/booleanAttrDirSpecs.js
+++ b/test/ng/directive/booleanAttrDirSpecs.js
@@ -10,7 +10,14 @@ describe('boolean attr directives', function() {
 
   it('should bind href', inject(function($rootScope, $compile) {
     element = $compile('<a ng-href="{{url}}"></a>')($rootScope)
-    $rootScope.url = 'http://server'
+    $rootScope.url = 'http://server';
+    $rootScope.$digest();
+    expect(element.attr('href')).toEqual('http://server');
+  }));
+
+
+  it('should bind href even if no interpolation', inject(function($rootScope, $compile) {
+    element = $compile('<a ng-href="http://server"></a>')($rootScope)
     $rootScope.$digest();
     expect(element.attr('href')).toEqual('http://server');
   }));