Can I use python to create flash like browser games?

You need to use something that the current browsers support, this means you're stuck with Flash, Java applets or Javascript+HTML if you want your game displayed in a browser.

You can use python on the backend and display pure HTML, if that is enough for your needs.

You could use Python to do client side scripting using Silverlight + IronPython. Of course, this requires all your users install Silverlight.

I think you're talking about using Python on the back end, in which case running something on the server side with Python (in which case this Django vs other Python web frameworks SO question is a good general list and may have what you're looking for.

The answer would be yes, assuming you consider this a good example of what you want to do:

http://pyjs.org/examples/Space.html

This browser-based version of Asteroids was created using Pyjamas, which enables you to write the code in python in one place, and have it run either on the browser, or on the desktop:

http://pyjs.org/

Having recently found Pyjamas, and also preferring to consolidate my code in one language (Python!) and location (instead of having some code server-side, and some browser/client-side, in different languages), it's definitely an exciting technology. Its authors have ported the Google Web Toolkit to Python, a really impressive feat, retaining the expressive power of Python (something like 80,000 lines of Java was shrunk to 8,000 lines of Python). More Pythonistas should know about it. :)