xml:base

Hi,

 From reading the documentation of xml:base, I am left unclear as to 
whether xml:base can not only be used on the parent of an element, or 
whether its presence on any previous ancestor is enough to trigger the 
resolving of relative URIs. This is especially unclear as I see a 
previous draft of the document did refer to "the nearest ancestor 
element" rather than what seems to me to be a more ambiguous 
"encapsulating entity".

thank you,
Brett Zamir