Cant use jenkins and Subversion 1.7? Any solution?

I'm not sure I understand your architecture. Your developers can continue to use 1.7 on their development machines (clients) even if the repository is running subversion 1.6.x. To my knowledge, the improved external support was introduced before 1.7, e.g. we use pegged externals in 1.6.x. In my opinion, compatibility with Jenkins trumps any benefits of running 1.7 on the server.

We run a central svn server running subversion 1.6.x (which supports pegged revision externals) and some developers have upgraded to subversion 1.7 clients on their development machines. Because the svn server is running 1.6.x, Jenkins can check out from our central repository (including checking out externals). I would recommend sticking with 1.6.x on your repository until Jenkins/SvnKit supports 1.7.

The Subversion 1.7 release notes say that the repository format has not changed, so you should be able to downgrade your repository if you've already upgraded:

Subversion 1.7 servers use the same repository format as Subversion 1.6. Therefore, it is possible to seamlessly upgrade and downgrade between 1.6.x and 1.7.x servers without changing the format of the on-disk repositories. (This is not correct in general for any pair of 1.x and 1.y servers, but happens to hold for 1.6 and 1.7.) If new 1.7 features were enabled on the server (in the hooks or server configuration files), they will, of course, have to be disabled prior to reverting back to a 1.6 server.

You will have to wait until the subversion plugin for Jenkins is updated to support Subversion 1.7. I am not sure when that will be. The development on the Hudson Subversion Plugin to upgrade is currently ongoing and should be available in the next release of the plugin.