The usual rule I follow is to declare variables with the minimum scope
that they need. If all uses of str are inside the try block, the
declaration of str would also be inside. If I need str in the catch
block, or in later code, its declaration has to go outside.

Patricia

Yes, I declare variables outside or inside a try-catch block, or indeed, any
block.  (You want in this matter to speak of a "block", not a "statement".  A
block is a set of statements delineated by curly braces.
<http://java.sun.com/docs/books/jls/third_edition/html/statements.html#14.2>
<http://java.sun.com/docs/books/jls/third_edition/html/statements.html#14.5>
)

The key word is "scope".  Scope is how far the meaning of a variable extends.
  For practical purposes, a variable has meaning from its point of
declaration to the closing curly brace that follows it.  (There are nuances
that I ignore here.  They are precisely defined by
<http://java.sun.com/docs/books/jls/third_edition/html/statements.html#14.4.2>
.)

In your example, the first declaration of "str" has meaning until the closing
brace of the method.  That means that every subsequent line of code inside the
method, including inside the try{} and catch{} blocks, can use that variable.

However, inside the try{} block there's a declaration of another variable
"str".  According to
<http://java.sun.com/docs/books/jls/third_edition/html/names.html#6.3.1>
this variable "shadows" the outer-scoped str within its inner scope.  The
scope of the inner str is the rest of the try{} block.

Inside the catch{} block, the try{}-scoped str is inaccessible, so str is the
method-scoped variable.

Please don't post multipart messages to Usenet.

Inside if possible.  (Ditto what Patricia said.)

if you decleare variables  outside the block, they will be available
outside the block.  If you need them only inside the block, declare
them there, same as any other block.