I just ran into this limitation myself, but it’s possible. You’ll have to whitelist the iframe source domain https://drive.google.com in allowed iframes.
Then grab the Embed item HTML which will look like this:
<iframe src="https://drive.google.com/file/d/1UQyQdaQyuDxbUm5krcB7vckNwwhPHCJi/preview" width="640" height="480"></iframe>
If working with a Share with others link, it will look like this:
https://drive.google.com/file/d/1UQyQdaQyuDxbUm5krcB7vckNwwhPHCJi/view?usp=sharing
so you’ll have to replace /view?usp=sharing with /preview for the iframe to work.