No. The iPhone will not support Java applications of any kind. Steve Jobs has been quoted as saying "Java's not worth building in. Nobody uses Java anymore. It's this big heavyweight ball and chain."
We can't disagree with the last part of Jobs' scathing remark, but stating that Java doesn't get used anymore couldn't be farther from the truth - especially in the world of mobile devices.
In any event, the iPhone will not offer Java support.