ds.xml

<!-- on persistence.xml file -->
<persistence xmlns="http://java.sun.com/xml/ns/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">

    <persistence-unit name="pu" transaction-type="JTA">
        <provider>org.hibernate.ejb.HibernatePersistence</provider>
        <jta-data-source>java:/DefaultDS</jta-data-source>
        <properties>
            <property name="hibernate.show_sql" value="true"/>
            <property name="hibernate.hbm2ddl.auto" value="create-drop"/>
        </properties>
    </persistence-unit>
</persistence>

<!-- on the ds.xml file -->
<?xml version="1.0" encoding="UTF-8"?>
<datasources>
   <local-tx-datasource>
      <jndi-name>DefaultDS</jndi-name>
      <connection-url>jdbc:hsqldb:${jboss.server.data.dir}${/}hypersonic${/}localDB</connection-url>
      <driver-class>org.hsqldb.jdbcDriver</driver-class>
      <user-name>sa</user-name>
      <password></password>
   </local-tx-datasource>   
</datasources>