Jello is gelatin. It is commonly used for bacterial cultures. I wouldn't use that. Water Gel that is used for cut flowers are polymers that have been shown to hold on to water pretty tightly. I would think agar is the way to go. You would basically be starting seeds in what amounts to tissue culture. Yes, it will work. People start hard to germinate seeds in vitro all the time. You will want to make sure to sterilize your seeds before putting them on the agar.

here are a couple of good places to start.
home tissue culture site

Well there were going to be a couple of links, but yahoo groups are blocked, so you'll have to find your way to the yahoo tissue culture page yourself. It contains quite a bit of very valuable information.