Defending champion Maria Sharapova shattered hopes of a Williams sisters double act at the Rome International by breezing past Venus Williams 6-4, 6-3 on Friday to reach the semi-finals.
Sharapova, seeded second, and the winner on clay in Stuttgart last month, demolished the elder Williams, who ended her afternoon with a fifth double-fault on match point to exit the event she won 13 years ago as a teenager.
Serena Williams, last week's winner in Madrid, won her 17th consecutive match on clay.
"No-one wants to win like that, but I'm happy to get half a day off," said the American of Pennetta's retirement.
"I've been playing a lot of days in a row. I even practised on Sunday. It's a shame it had to end because I was really getting into the match."
The American said that her form going into the French Open, which starts a week on Sunday, is good.
"I'm feeling better on clay than I did at the US Open (where she lost a bad-tempered final to Samantha Stosur). I have a better ranking and my fitness is better.
"I feel I can play on any surface and that's the right attitude for me. I'm enjoying my tennis. This is where I belong and what I do best."
Williams needs two more wins on the red Rome clay to notch a third straight WTA title on the surface, after winning Charleston last month and claiming the honours in Madrid.
Five of the 30-year-old's 41 career titles have been won on clay, and she previously triumphed in Rome a decade ago.
Pennetta took a lengthy medical treatment time-out when trailing 3-0 in the first set and looked clearly out of sorts.
After getting her wrist taped, the last Italian woman in the field tried one more game before giving up.
Pennetta, ranked 21 in the world, and a clay finalist in February in Acapulco, was playing in her third quarter-final of 2012.
French Open champion Li was leading comfortably 6-1, 5-2 when her game became crippled by caution with the Chinese star only managing to snatch the win in a tense tiebreaker.
"I'm not worried about the forehands or the backhands, it's finishing the matches that is my problem," said Li, the world number nine, who has not won a title since her Paris triumph almost a year ago.
"There is not one player out there who gives up in a match, everyone is playing at such a high level. That's my problem - I need to win easier. It's a big problem for me to close out the matches."
Source: AFP Global Edition