_Can_ they form near the the equator? Yes. Cyclone Agni from 2004 is probably the best example of this: according to the India Meteorological Department, it was 1.5 degrees north of the equator when it became a tropical cyclone, and before it reached that strength, the circulation center may have crossed the equator twice.
_Is it normal?_ No. There are any number of sources that will tell you that tropical cyclones normally form at least 5 degrees poleward of the equator (eg. this NOAA page (warning: contains Geocities-style web design)); most of these trace back to work by William Gray, but the general situation can be summarized by the following image:
!Tropical Cyclone tracks from 1945 to 2006, showing a distinct gap at the equator Image by Wikipedia user Citynoise using NOAA data.