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As @MrTJ said in the comments. Apparently Apple won't let you have a simple "website wrapper" application. So your only options would be porting Ruby, like the rest of my answer describes, porting the application natively, or doing a web app like @MrTJ describes in his answer. Porting it natively, supported by RESTlike web services, would probably be the best solution. Web Apps are nice, but native applications are usually nicer. It depends on what kind of user experience you want to provide.
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I need to read more carefully. I answered your question assuming you wanted to embed the application, without needing to access the internet. If that is NOT what you are trying to do, then it is definitely possible.
Just make an application that has a webview and loads the base URL for the site. You will probably want to do a special version of the site that ALWAYS has back buttons etc, so the user can never get stuck in a corner of your site (since you want the navbar hidden).
Also, personally I would not do this, you can, but you probably shouldn't. You will need to handle what to do when the user does not have an internet connection. And you may make them less than happy when they (potentially) paid for an application that they can't use everywhere. Native Applications tend to sell/perform much better.
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My Personal Reaction to This Question
Cool Question. Personally I am not a fan or Ruby or Rails (I'm a bit more of a Python guy, but Python is actually why I know anything about this situation), but this is a pretty cool problem regardless.
Questions to ask yourself
Is this possible? Probably
Is it a good idea? Probably Not
Is it going to be worth the effort? Probably Not
And most importantly, will Apple let you sell it? ....Maybe, but for something like this, you won't know till you try....
What you Need
A WebView that uses a protocol to talk to your native application. This would be like the URL hash tag hack used to talk to an iFrame in a browser, or the protocol that PhoneGap uses to communicate with it's WebView
Embedded version of the Ruby Interpreter. People have been doing this on iOS with both the Python and JavascriptCore interpreters. Some people will try to tell you Apple won't let you do this, but that is no longer true. You will need to compile Ruby specifically for iOS, this will probably be annoying, but I bet if you base your implementation on the Python/Javascript implementations, you could eventually get it working.
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Another SO question/answer with relevance to this answer
Embed a JavaScript engine in an iOS application
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Embedded version of Rails... Good luck :)
Method of triggering the Rails app without a web server (you probably can't run apache locally on an iPhone (would be difficult and would probably crash immediately), and definitely not on Android). You will either need to trigger each view manually somehow, piping the output to either a string or a file, and load that string (HTML) or file into the WebView
Method of triggering navigation in the Rails application. This will require catching link presses from the WebView (you can watch for the URL changing on iOS), and triggering the proper Rails view to produce its HTML.
Problems
Ruby and Rails are both VERY HEAVY. Most implementations I have seen require at least 256mb of RAM, iOS will instantly kill your application if it tries using this much memory at startup. Android will probably handle it far less gracefully and just crash unexpectedly at some point in the application run.
Android does not run Native Compiled code. This means you will need to run JRuby, which will leave you with an interpreted language running in an interpreted language (read as, Slow As Hell On a Mobile Device).
This will require writing MORE Ruby, some Javascript, and MORE Java or Objective-C. So in other words, Don't. Figure out what your application does, and port it.
Key Learning
This is will probably take way more effort than any sane developer would ever want to spend on a 'simple web application'. You will be far better off learning Native development, since that will be required to get this job done anyway.