When updating world with: emerge --update --deep --newuse world, I get the following: emerge: there are no ebuilds built with USE flags to satisfy "dev-libs/libxml2[icu]".emerge: there are no ebuilds built with USE flags to satisfy "dev-libs/libxml2[icu]".
Is your tree out of date ? 2.7.8 has been in stable for over 3 monts.
You need to rebuild libxml2 with USE="icu" before you can run the world update. I'd recommend putting, dev-libs/libxml2 icu in your /etc/portage/package.use