No you cannot turn on bluetooth through the app as far as I know, Gamekit may give the opportunity to do so with multiplayer games (peer to peer). There is a CoreBluetooth Framework that can search for other bluetooth devices and notify your app of the devices its found, but after some testing and mentioned in the framework reference this framework can only be used with the iPhone 4S. I imagine this is because Bluetooth 4.0, in the iPhone 4S, is more energy efficient so Apple is allowing for more apps to take opportunity of this feature.
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