  Much of the theory of entanglement concerns the transformations that are
possible to a state under local operations with classical communication (LOCC);
however, this set of operations is complicated and difficult to describe
mathematically. An idea which has proven very useful is that of the {\it
entanglement monotone}: a function of the state which is invariant under local
unitary transformations and always decreases (or increases) on average after
any local operation. In this paper we look on LOCC as the set of operations
generated by {\it infinitesimal local operations}, operations which can be
performed locally and which leave the state little changed. We show that a
necessary and sufficient condition for a function of the state to be an
entanglement monotone under local operations that do not involve information
loss is that the function be a monotone under infinitesimal local operations.
We then derive necessary and sufficient differential conditions for a function
of the state to be an entanglement monotone. We first derive two conditions for
local operations without information loss, and then show that they can be
extended to more general operations by adding the requirement of {\it
convexity}. We then demonstrate that a number of known entanglement monotones
satisfy these differential criteria. Finally, as an application, we use the
differential conditions to construct a new polynomial entanglement monotone for
three-qubit pure states. It is our hope that this approach will avoid some of
the difficulties in the theory of multipartite and mixed-state entanglement.
