Looks like the project you are trying to use is rather old, (last commit date is Date: Mar 30, 2011). And it is written there that they are only planing to have a support of version 3.x.
Anyway here is the answer to your question(rather old too) Unable to get google-appengine for Jruby to work
And this search could be helpful https://stackoverflow.com/questions/tagged/google-app-engine+ruby
From rational point of view it is not very good idea to use this gems for production. If you need cloud hosting for your ruby procejct heroku would be a solution. If you require appengine - you better go Java, Python or Go which are officially supported.