We changed the version name and xsd as the following:
<?xml version="1.0" encoding="UTF-8" ?>
<persistence xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance"
xsi:schemaLocation="http://java.sun.com/xml/ns/persistence http://java.sun.com/xml/ns/persistence/persistence_2_0.xsd"
version="2.0" xmlns="http://java.sun.com/xml/ns/persistence">
Which worked fine.
Please mention in comments if you think additional things need to be done and I will update this answer.