The short answer is NO!!!!!!!  I won't bore you with technical details
as to why not.

Itself, liquid water cannot produce combustion.

If the water is vaporized then the produced steam can power a huge
engine (see Papin, Newcomen and Watt about that). This what we use in
big ships or factory boilers. The vapor comes form an external source
of heat: nuclear, external combustion, solar furnace, etc.

If the water is going through electrolysis, the answer is also yes.
Now, there seems to be two type of electrolysis that can occur from
liquid water which should be really called H+OH- and not H2O since
this is the solid format (ice). Hence:
1- the well known electrolysis, producing two diatomic gases, namely
H2 and O2
They can be recombined easily with a spark and this with what many are
trying to offer with fuel cells.
2- a much less known electrolysis demanding much less energy that
produces a plasma called HHO or Brown Gas. Recent trends in chemistry
research has brought to lighr the existence of those plasmas or matter
states which are not always very stable and they last for while until
they revert back to a more stable state (one example, the liquid
crystals which are now in any flat screen displays that were discovred
lately by french scientists). It is advocated that this could
recombine and produce energy in much more efficient way than with the
former. You put the HHO along some fuel entering an engine and this
HHO draws its energy difference and energy to start combining from the
petrol combustion but then add its own release to the process. I have
seen claims of 50 % savings on fuel cost by one mechanics how did fit
it on his Renault Espace with a 2.2 L TDi.

Here is the first paper that appeared on this HHO issue on a
scientific journal:

http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V3F-4HVDJBT-1&_user=6
91352&_coverDate=08%2F31%2F2006&_alid=812153417&_rdoc=6&_fmt=high&_orig=search&_
cdi=5729&_sort=d&_docanchor=&view=c&_ct=20&_acct=C000038698&_version=1&_urlVersi
on=0&_userid=691352&md5=2463876b307e1abd78efa8db3788c044
I have the paper with me and I will eventually spend some time in the
theory.

This paper appearance makes it a very serious issue. But, these
allegations have triggered a lot of discussions, including insults
from people who do display behavioral problems. Myself, I have tried
some experiment on one very old Land Rover with one guy (the owner)
and we did save up to 65 % on first trials until we had problems with
the electrolysis bottle which cannot be used anymore. We are not
looking into making a better design than the one proposed by some
vendors.

One thing for sure is that water in vapor format display a lot of
energy capacity and they used to power those steam engines. Now some
people have designed a system that uses the car vaccuum system and its
heat to get the water into vapor format and mix it while it is hot
with the fuel. When the new mixture goes into combustion, the vapor
does expand producing more force on the piston head. Some say that
they can save up to 30 % on fule doing so, but be careful not to bring
too much and drown the combustion. Question of balance here. One could
use solar energy to produce the vapor.

LHR