I am using the below code for replacing a string inside a shell script.
echo $LINE | sed -e \'s/12345678/\"$replace\"/g\'
but it\'s getting
To let your shell expand the variable, you need to use double-quotes like
sed -i "s#12345678#$replace#g" file.txt
This will break if $replace contain special sed characters (#, \). But you can preprocess $replace to quote them:
replace_quoted=$(printf '%s' "$replace" | sed 's/[#\]/\\\0/g')
sed -i "s#12345678#$replace_quoted#g" file.txt