Is an empty iframe src valid?

The HTML 5 working draft, section 4.8.2, says (emphasis mine):

The src attribute gives the address of a page that the nested browsing context is to contain. The attribute, if present, must be a valid non-empty URL potentially surrounded by spaces.

According to RFC 3986, valid URLs must begin with a scheme name, and relative references cannot only consist in a fragment.

Therefore, # is not a valid URL, and should not be used as the value of the src attribute.

Use about:blank instead.

just <iframe src='about:blank'></iframe>