Certainly. Just put the photo on Video 2 and the video on Video 1 -- then resize the photo so that it's small enough you can see the video. (Although you can resize both and position them so that you can see all of both at once too, if you'd like.)
What version of Premiere Elements on what computer operating system?
Assuming Premiere Elements 11, 12, or 13 Windows details...
Supplemental contribution to your question...
Please review and consider the merits of using a PiPs preset (Picture in Picture)
These are presets found under fx Effects/Presets/25% or 40% category). They come in static version as well as spin in and other motion versions.