Correct, but I disagree with the spec (I wrote about it here http://books.google.com/books?id=n7WGd4_cg6kC&lpg=PP1&pg=PA108). 

Unless this has any tangible impact on users, browsers, devices, or assistive technologies -- and it doesn't, to the best of my knowledge -- I see no reason to abandon the cite element for citing entities, other than slavish adherence to a misguided specification. It's the most semantically appropriate element; the spec is wrong. See also http://24ways.org/2009/incite-a-riot/