As of r629224 the Ivy build appears broken when using JDK 1.4:

compile-core:
  [javac] Compiling 277 source files to E:\wstmp\ivy\build\classes\core
  [javac]
E:\wstmp\ivy\src\java\org\apache\ivy\plugins\parser\m2\PomReader.java:259:
cannot resolve symbol
  [javac] symbol : class Iterable
  [javac] location: class
org.apache.ivy.plugins.parser.m2.PomReader.PomDependencyData
  [javac]      public Iterable/*<ModuleId>*/ getExcludedModules() {
  [javac]           ^
  [javac]
E:\wstmp\ivy\src\java\org\apache\ivy\plugins\parser\m2\PomReader.java:176:
cannot resolve symbol
  [javac] symbol : class Iterable
  [javac] location: class org.apache.ivy.plugins.parser.m2.PomReader
  [javac]   public Iterable/* <PomDependencyData> */ getDependencies() {
  [javac]        ^
  [javac]
E:\wstmp\ivy\src\java\org\apache\ivy\plugins\parser\m2\PomReader.java:192:
cannot resolve symbol
  [javac] symbol : class Iterable
  [javac] location: class org.apache.ivy.plugins.parser.m2.PomReader
  [javac]   public Iterable/* <PomDependencyMgt> */ getDependencyMgt() {
  [javac]        ^
  [javac]
E:\wstmp\ivy\src\java\org\apache\ivy\plugins\parser\m2\PomReader.java:298:
cannot resolve symbol
  [javac] symbol : method getTextContent ()
  [javac] location: interface org.w3c.dom.Element
  [javac]         return node.getTextContent();
  [javac]                ^
  [javac] Note: Some input files use or override a deprecated API.
  [javac] Note: Recompile with -deprecation for details.
  [javac] 4 errors

The problem is at the API level which is why <javac source="1.4" target="1.4"/>
alone won't catch it. You actually need to compile with a 1.4 JDK to see
the problem.