diff --git a/markdownify/__init__.py b/markdownify/__init__.py
index a37f870..dd2507d 100644
--- a/markdownify/__init__.py
+++ b/markdownify/__init__.py
@@ -67,6 +67,23 @@ def _todict(obj):
     return dict((k, getattr(obj, k)) for k in dir(obj) if not k.startswith('_'))
 
 
+def remove_whitespace_inside(el):
+    """Return to remove whitespace immediately inside a block-level element."""
+    if not el or not el.name:
+        return False
+    if html_heading_re.match(el.name) is not None:
+        return True
+    return el.name in ('p', 'blockquote',
+                       'ol', 'ul', 'li',
+                       'table', 'thead', 'tbody', 'tfoot',
+                       'tr', 'td', 'th')
+
+
+def remove_whitespace_outside(el):
+    """Return to remove whitespace immediately outside a block-level element."""
+    return remove_whitespace_inside(el) or (el and el.name == 'pre')
+
+
 class MarkdownConverter(object):
     class DefaultOptions:
         autolinks = True
@@ -120,27 +137,23 @@ def process_tag(self, node, convert_as_inline, children_only=False):
         if not children_only and (isHeading or isCell):
             convert_children_as_inline = True
 
-        # Remove whitespace-only textnodes in purely nested nodes
-        def is_nested_node(el):
-            return el and el.name in ['ol', 'ul', 'li',
-                                      'table', 'thead', 'tbody', 'tfoot',
-                                      'tr', 'td', 'th']
-
-        if is_nested_node(node):
-            for el in node.children:
-                # Only extract (remove) whitespace-only text node if any of the
-                # conditions is true:
-                # - el is the first element in its parent
-                # - el is the last element in its parent
-                # - el is adjacent to an nested node
-                can_extract = (not el.previous_sibling
-                               or not el.next_sibling
-                               or is_nested_node(el.previous_sibling)
-                               or is_nested_node(el.next_sibling))
-                if (isinstance(el, NavigableString)
-                        and six.text_type(el).strip() == ''
-                        and can_extract):
-                    el.extract()
+        # Remove whitespace-only textnodes just before, after or
+        # inside block-level elements.
+        remove_inside = remove_whitespace_inside(node)
+        for el in node.children:
+            # Only extract (remove) whitespace-only text node if any of the
+            # conditions is true:
+            # - el is the first element in its parent (block-level)
+            # - el is the last element in its parent (block-level)
+            # - el is adjacent to a block-level node
+            can_extract = (remove_inside and (not el.previous_sibling
+                                              or not el.next_sibling)
+                           or remove_whitespace_outside(el.previous_sibling)
+                           or remove_whitespace_outside(el.next_sibling))
+            if (isinstance(el, NavigableString)
+                    and six.text_type(el).strip() == ''
+                    and can_extract):
+                el.extract()
 
         # Convert the children first
         for el in node.children:
@@ -179,12 +192,16 @@ def process_text(self, el):
         if not el.find_parent(['pre', 'code', 'kbd', 'samp']):
             text = self.escape(text)
 
-        # remove trailing whitespaces if any of the following condition is true:
-        # - current text node is the last node in li
-        # - current text node is followed by an embedded list
-        if (el.parent.name == 'li'
-                and (not el.next_sibling
-                     or el.next_sibling.name in ['ul', 'ol'])):
+        # remove leading whitespace at the start or just after a
+        # block-level element; remove traliing whitespace at the end
+        # or just before a block-level element.
+        if (remove_whitespace_outside(el.previous_sibling)
+                or (remove_whitespace_inside(el.parent)
+                    and not el.previous_sibling)):
+            text = text.lstrip()
+        if (remove_whitespace_outside(el.next_sibling)
+                or (remove_whitespace_inside(el.parent)
+                    and not el.next_sibling)):
             text = text.rstrip()
 
         return text
@@ -257,7 +274,7 @@ def convert_a(self, el, text, convert_as_inline):
     def convert_blockquote(self, el, text, convert_as_inline):
 
         if convert_as_inline:
-            return text
+            return ' ' + text.strip() + ' '
 
         return '\n' + (line_beginning_re.sub('> ', text.strip()) + '\n\n') if text else ''
 
@@ -355,7 +372,7 @@ def convert_li(self, el, text, convert_as_inline):
 
     def convert_p(self, el, text, convert_as_inline):
         if convert_as_inline:
-            return text
+            return ' ' + text.strip() + ' '
         if self.options['wrap']:
             # Preserve newlines (and preceding whitespace) resulting
             # from <br> tags.  Newlines in the input have already been
diff --git a/tests/test_conversions.py b/tests/test_conversions.py
index 9c1edc3..0be1d0c 100644
--- a/tests/test_conversions.py
+++ b/tests/test_conversions.py
@@ -66,7 +66,7 @@ def test_blockquote_with_paragraph():
 
 def test_blockquote_nested():
     text = md('<blockquote>And she was like <blockquote>Hello</blockquote></blockquote>')
-    assert text == '\n> And she was like \n> > Hello\n\n'
+    assert text == '\n> And she was like\n> > Hello\n\n'
 
 
 def test_br():
@@ -136,7 +136,7 @@ def test_hn():
 
 
 def test_hn_chained():
-    assert md('<h1>First</h1>\n<h2>Second</h2>\n<h3>Third</h3>', heading_style=ATX) == '\n# First\n\n\n## Second\n\n\n### Third\n\n'
+    assert md('<h1>First</h1>\n<h2>Second</h2>\n<h3>Third</h3>', heading_style=ATX) == '\n# First\n\n## Second\n\n### Third\n\n'
     assert md('X<h1>First</h1>', heading_style=ATX) == 'X\n# First\n\n'
     assert md('X<h1>First</h1>', heading_style=ATX_CLOSED) == 'X\n# First #\n\n'
     assert md('X<h1>First</h1>') == 'X\n\nFirst\n=====\n\n'
@@ -196,7 +196,7 @@ def test_head():
 def test_hr():
     assert md('Hello<hr>World') == 'Hello\n\n---\n\nWorld'
     assert md('Hello<hr />World') == 'Hello\n\n---\n\nWorld'
-    assert md('<p>Hello</p>\n<hr>\n<p>World</p>') == '\n\nHello\n\n\n---\n\n\nWorld\n\n'
+    assert md('<p>Hello</p>\n<hr>\n<p>World</p>') == '\n\nHello\n\n---\n\nWorld\n\n'
 
 
 def test_i():
@@ -303,3 +303,13 @@ def callback(el):
     assert md('<pre class="python">test\n    foo\nbar</pre>', code_language_callback=callback) == '\n```python\ntest\n    foo\nbar\n```\n'
     assert md('<pre class="javascript"><code>test\n    foo\nbar</code></pre>', code_language_callback=callback) == '\n```javascript\ntest\n    foo\nbar\n```\n'
     assert md('<pre class="javascript"><code class="javascript">test\n    foo\nbar</code></pre>', code_language_callback=callback) == '\n```javascript\ntest\n    foo\nbar\n```\n'
+
+
+def test_spaces():
+    assert md('<p> a b </p> <p> c d </p>') == '\n\na b\n\nc d\n\n'
+    assert md('<p> <i>a</i> </p>') == '\n\n*a*\n\n'
+    assert md('test <p> again </p>') == 'test\n\nagain\n\n'
+    assert md('test <blockquote> text </blockquote> after') == 'test\n> text\n\nafter'
+    assert md(' <ol> <li> x </li> <li> y </li> </ol> ') == '\n\n1. x\n2. y\n'
+    assert md(' <ul> <li> x </li> <li> y </li> </ol> ') == '\n\n* x\n* y\n'
+    assert md('test <pre> foo </pre> bar') == 'test\n```\n foo \n```\nbar'