Can you connect 2 500 milliamp devices to a 1 amp source?

In theory yes you can. The theoretical current draw would be .5 (500 milliamps) x 2 = 1 amp. However, in practice this would not be advisable.

You should allow for surges and other unforeseeable issues. Allow 20% for those probabilities and you should be safe. This would be about 1.2 - 1.5 amperes on your source end.