I played around with domi27's idea and came up with this. I made a nested array as my tree, ['link']['sublinks'] is null or another array of more of the same.
Templates
The sub-template file to recurse with:
<!--includes/menu-links.html-->
{% for link in links %}
<li>
<a href="{{ link.href }}">{{ link.name }}</a>
{% if link.sublinks %}
<ul>
{% include "includes/menu-links.html" with {'links': link.sublinks} %}
</ul>
{% endif %}
</li>
{% endfor %}
Then in the main template, call this (kind of redundant 'with' stuff there):
<ul class="main-menu">
{% include "includes/menu-links.html" with {'links':links} only %}
</ul>
Macros
A similar effect can be achieved with macros:
<!--macros/menu-macros.html-->
{% macro menu_links(links) %}
{% for link in links %}
<li>
<a href="{{ link.href }}">{{ link.name }}</a>
{% if link.sublinks %}
<ul>
{{ _self.menu_links(link.sublinks) }}
</ul>
{% endif %}
</li>
{% endfor %}
{% endmacro %}
In the main template, do this:
{% import "macros/menu-macros.html" as macros %}
<ul class="main-menu">
{{ macros.menu_links(links) }}
</ul>
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