Is it possible to submit two papers to the same conference which are citing each other?
Both papers were accepted and they are both very related, so I think to cite the papers in each other, when submitting the camera ready version. Is this allowed or is it not a good idea?
It's unusual in journals, but allowed - it's more common in special thematic issues which tend to be prepared at the same time and cover similar topics, perhaps even with authors in common across some papers. There may be a specific form of citation for, eg, "in this issue" rather than a volume number (I've seen this once or twice). This is not to say that every editor will like it, but there's no absolute rule against it.
I would assume that published conference papers, generally speaking, are in the same boat - unusual, but no fundamental principle why not, and individual venues may have specific policies.