It should be possible. I just gave it a go, and it worked for me in Chrome, Firefox, and IE11. What browser are you using and is the YouTube video public?
Here's what worked for me:
1. Open YouTube
2. Copy the URL for the video from the Embed code snippet they provide. (You only want the URL, any other tags will cause a syntax error.)
3. I pasted that URL in the our iFrame URL input:
4. I changed the height to 600, hit apply, and then saved the site for good measure.
Yes there is!
Drop the Iframe into your layout from Site Editor, find the YouTube video you'd like to add, and instead of just copying the link to the video; click the "Share" tab under the video frame, then "Embed," and take a look at the embed URL.
The URL is lengthy, but out of the whole text string (e.g. <iframe width="560" height="315" src="https://www.youtube.com/embed/HNpDFooJsfc" frameborder="0" allowfullscreen></iframe>), you only need the part that reads https://www.youtube.com/embed/DQtgNH443wQ.
Paste that smaller section of the embed URL into the "Iframe URL" box in the Iframe settings pane, set your height, click apply and it should work! Good luck.