well, quoting the dtd for xhtml strict:
<!ENTITY % block
"p | %heading; | div | %lists; | %blocktext; | fieldset | table">
<!ENTITY % Block "(%block; | form | %misc;)*">
<!-- %Flow; mixes block and inline and is used for list items etc. -->
<!ENTITY % Flow "(#PCDATA | %block; | form | %inline; | %misc;)*">
So yes you could do so, and as %block; expands to %blocktext%, you could technically shove <hr>'s in there too (not sure why, seems kind of weird).
As for whether or not it's semantically correct is a different story. For li's to be li's, they need to be a list of something (hence why you might see a lot of menus done as li's and css'ed to look pretty, because menus are a list of links).