As in the title, is it possible? If so, how?
Although I have never tried running JIRA on Google App Engine, I guess it will not work and making it work would not be easy.
Take a look at http://code.google.com/appengine/docs/java/overview.html
The JVM runs in a secured "sandbox" environment to isolate your application for service and security. The sandbox ensures that apps can only perform actions that do not interfere with the performance and scalability of other apps. For instance, an app cannot spawn threads, write data to the local file system or make arbitrary network connections. An app also cannot use JNI or other native code. The JVM can execute any Java bytecode that operates within the sandbox restrictions.
JIRA uses threads (e.g. its services), JIRA reads and writes to file system (whole Lucene cache bases on files).
Moreover JIRA has tons of dependencies on 3rd party libraries - so it inhertis potential incompatibilities with sanboxed environment from all of them too.
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