Behavior of nested Links, pseudos and style

Consider the following fragments of an xhtml document:

<style type="text/css">
a:link{text-decoration:none;}
a:hover{color:red;text-decoration:underline;}   
</style>

And

<a href="outer_link">
  outer link, 
  <a href="inner_link">
    inner link
  </a>
</a>

In both Mozilla5 (Gecko/20011120) and IE6, during mouseover events on
the outer link, only the non inner link changes style.

Is this according to spec?

Test page attached (linkTest.htm, 499Bytes).

Kindest regards,

Manos