I would like to include image in a jupyter notebook.
If I did the following, it works :
from IPython.display import Image
Image(\"img/picture.png\")
You mustn't use quotation marks around the name of the image files in markdown!
If you carefully read your error message, you will see the two %22
parts in the link. That is the html encoded quotation mark.
You have to change the line

to

UPDATE
It is assumed, that you have the following file structure and that you run the jupyter notebook
command in the directory where the file example.ipynb
(<-- contains the markdown for the image) is stored:
/
+-- example.ipynb
+-- img
+-- picture.png