diff --git a/htmlcc/parser.py b/htmlcc/parser.py
index f19e91e..1db54f1 100644
--- a/htmlcc/parser.py
+++ b/htmlcc/parser.py
@@ -16,6 +16,8 @@
 
 from .emitter import Emitter
 
+import re
+
 class Parser:
 	"""Parser implementation for template files"""
 	
@@ -24,9 +26,8 @@ class Parser:
 		self.emitter = emitter
 		
 		# Internal state
-		self.cur_line_contains_handlebars = False
-		self.cur_line_contains_nonblank_literal = False
-		self.cur_line_leading_ws = ''  # Buffer for leading whitespace
+		self.start_of_line = True
+		self.cur_line_suppress_whitespace = False
 		self.in_html = False
 	
 	def parse(self) -> None:
@@ -191,27 +192,16 @@ class Parser:
 			raise SyntaxError('Unexpected text outside page block')
 		
 		if s.isspace():
-			if not self.cur_line_contains_nonblank_literal:
-				if '\n' in s:
-					# End of line which contains only nonblank literals
-					if self.cur_line_contains_handlebars:
-						# Do not print the whitespace
-						self.reset_new_line()
-						return
-				else:
-					# Not sure yet whether we should print the space - add to whitespace buffer
-					self.cur_line_leading_ws += s
-					return
+			if self.start_of_line:
+				# Whitespace at start of line
+				self.cur_line_suppress_whitespace = line_contains_only_ws_or_handlebars(s, self.buffer)
+			
+			if not self.cur_line_suppress_whitespace:
+				self.emitter.output_literal_string(s)
 		else:
-			self.commit_leading_ws()
-			self.cur_line_contains_nonblank_literal = True
+			self.emitter.output_literal_string(s)
 		
-		# Conditionally output the literal string
-		if not self.cur_line_contains_nonblank_literal and self.cur_line_contains_handlebars:
-			# If the current line contains handlebars and whitespace only, do not emit literal string
-			return
-		
-		self.emitter.output_literal_string(s)
+		self.start_of_line = False
 		
 		if '\n' in s:
 			self.reset_new_line()
@@ -219,16 +209,29 @@ class Parser:
 	def reset_new_line(self) -> None:
 		"""Reset the internal state for a new line"""
 		
-		self.cur_line_contains_handlebars = False
-		self.cur_line_contains_nonblank_literal = False
-		self.cur_line_leading_ws = ''
-	
-	def commit_leading_ws(self) -> None:
-		"""Commit cur_line_leading_ws buffer to output"""
-		
-		if self.cur_line_leading_ws:
-			self.emitter.output_literal_string(self.cur_line_leading_ws)
-			self.cur_line_leading_ws = ''
+		self.start_of_line = True
+		self.cur_line_suppress_whitespace = False
 
 class SyntaxError(Exception):
 	pass
+
+def line_contains_only_ws_or_handlebars(s: str, buffer: str) -> bool:
+	"""Return True if the given line contains only whitespace or handlebars"""
+	
+	if not s.isspace():
+		return False
+	
+	if '\n' in s:
+		return True
+	
+	# Read until the next newline or EOF
+	stop_reading_idx = buffer.index('\n') + 1 if '\n' in buffer else len(buffer)
+	remaining_line = buffer[:stop_reading_idx]
+	
+	# Remove all handlebars
+	text_in_remaining_line = re.sub(r'\{\{.*?\}\}|\{!.*?!\}|\{%.*?%\}|\{#.*?#\}', r'', remaining_line)
+	
+	if not text_in_remaining_line:
+		return True
+	
+	return text_in_remaining_line.isspace()