Cascading <li>-hover effect using CSS

I have got an simple html unordered list.

<ul>
    <li>Item 1</li>
    <li>
        Group 1
        <ul>
            <li>Item 2</li>
            <li>Item 3</li>
        </ul>
    </li>
</ul>

I want to use CSS to make a simple effect when the mouse is over an Item or a Group.

li:hover
{
    background-color:#ff0000;
}

It works quite fine for "Group 1" or "Item 1" (not contained in a group) - When I'm moving the mouse over the color changes. But if I move over "Item 2" or "Item 3" "Group 1" also remains hightlighted (red background). In this case I only want to highlight "Item 2" or "Item 3".

Has anyone an idea how to do this?

Thanks for your help!

=============================== EDIT

<ul>
    <li>Item 1</li>
    <li>
        Group 1
        <ul>
            <li>Item 2</li>
            <li>Group 2
                <ul>
                    <li>Item 3</li>
                    <li>Item 4</li>
                </ul>
            </li>
        </ul>
    </li>
</ul>

Mouse Over xxx should highlight yyy
xxx -> yyy
Item1 -> Item1
Group1 -> Group1, Item2, Group2, Item3, Item4
Item2 -> Item2
Group2 -> Group2, Item3, Item4
Item3 -> Item3
Item4 -> Item4

Please see http://image-upload.de/image/r76d79/1c7af56a19.png ,just a quick drawing.