In those circumstances? Big no-no. Personally I think it's okay if it's a second or third cousin or more distant, because then you avoid the whole 'six toes' thing. Anything like first cousin or closer is a bit too iffy for my liking. I'll admit though, when I was about six I had a crush on one of my second cousins, who's a year older than me. I don't know many people in my family outside my immediate family, though I have a very large extended family on my mother's side, so when my great uncle died just before Christmas I met another second cousin at his funeral. When talking to her, bearing in mind I'd never met her before, I was actually struck by how nice she seemed and how attractive she was. Only thing that stopped me from trying to chat her up was the potential reaction from other relatives...
So yeah, I reckon second cousins is okay, just about, and anything more distant than that is fine. Anything closer than that though, and it's wrong.
EDIT: I just realised the irony of my comment. The next short story I plan to write is a modern version of Hansl and Gretel, including subtle hints of brother/sister incest. I should probably think a bit more about what I post in future...
I stand by my comments though.