Vlado,
You're right. It doesn't update on the fly, but only if you reload worksheet2.
What does worksheet1 do? Is it used stand alone as well?
Either way, I suppose worksheet1 contains some functions, where variable1 is input.
If worksheet1 is useless without worksheet2, you could consider to move the definition of variable1 to worksheet2 BEFORE the reference to worksheet1.
Additionally be sure that Worksheet1 only contains functions. In Worksheet2, AFTER the reference to worksheet1 you can call any defined function (also when it's defined in Worksheet1) with a.g. Variable1 as parameter, and get the result.
If worksheet1 does have a use without/apart from worksheet2, you might consider using a (another) wrapper worksheet around Worksheet1 for that purpose.
Hope this helps,
Luc