Normally the image will be shown only when your MS Word is set as the message editor for HTML format and if you have set it to some other thing then you won't be able to get it and the images gets stored in a sub-directory that has the same name
Try to use the below code which content of the XML file:
HTML Code:
<xml xmlns:o="urn:schemas-microsoft-com:office:office">
<o:MainFile HRef="../SIGNATURE1.htm" />
<o:File HRef="image1.jpg" />
<o:File HRef="image2.jpg" />
<o:File HRef="filelist.xml" />
</xml>
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