You can do this with a data URL. This includes the entire document in a single string of HTML. For example, the following HTML:
<html><body>foo</body></html>
can be encoded as this:
data:text/html;charset=utf-8,%3Chtml%3E%3Cbody%3Efoo%3C/body%3E%3C/html%3E
and then set as the src
attribute of the iframe. Example.
Edit: The other alternative is to do this with Javascript. This is almost certainly the technique I'd choose. You can't guarantee how long a data URL the browser will accept. The Javascript technique would look something like this:
var iframe = document.getElementById('foo'),
iframedoc = iframe.contentDocument || iframe.contentWindow.document;
iframedoc.body.innerHTML = 'Hello world';
Example
Edit 2 (December 2017): use the Html5's srcdoc attribute, just like in Saurabh Chandra Patel's answer, who now should be the accepted answer! If you can detect IE/Edge efficiently, a tip is to use srcdoc-polyfill library only for them and the "pure" srcdoc attribute in all non-IE/Edge browsers (check caniuse.com to be sure).
<iframe srcdoc="<html><body>Hello, <b>world</b>.</body></html>"></iframe>
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