Yep. Premier can cope with this admirably.
It was different in the days of Premiere 6 and 6.5 but I'll assume you are using Premiere pro 1 or 1.5 - basically because that's what I have and I can't remember how I did it in 6.5
Start you r Premiere pro project and create a timeline. Import your still picture. Best tomake sure the image resolution of th still image is a lot greater than your premiere project.
Drag and drop the still on your timeline.
Select the still on the timeline. With it selected click onthe 'Effect COntrols' tab of the Monitor window.
Click on the little arrow to the left of the word 'Motion' to open up the motion controls.
All you need to do is keyframe the position and scale. haveing a scale > 100% will effectively be a zoom. As you animate a zoom-in simply adjust the x and y position of the still to make sure the part of the picture you want to see is visible.
Easy as that.