Looks like the web service is really just returning a string of XML. The best way to parse it would be to:
For example, I went here and entered Belgium.That returned a string as you describe above. You can copy-and-paste that string into an XSD generator like this one: here
Save that output in a new text file, and name it something like Countries.xsd
. Then you can import the XML Schema (the XSD file) into the modeler. If you use the button at the top of the Domain Model "Import web service/XML file", the modeler will create entities and an XML import mapping for you.
Finally, in your microflow, after you call the web service, use the "Import XML" activity to parse your string into domain model objects.