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Set the maven local repository location in a pom.xml file?

It's possible to set the maven local repository in settings.xml:
<localRepository>${user.home}/.m2/repository</localRepository>
And it's possible to set the maven local repository on the command line:
mvn clean install -Dmaven.repo.local=repository
Is it possible to specify within the pom.xml itself?
Note: I'd like a way to specify, in the pom.xml, where maven initially searches for artifacts (by default, ~/.m2/repository) and where maven installs artifacts via mvn install (by default, ~/.m2/repository).

According to the Maven POM Reference and the Guide to using multiple repositories, you can specify repositories in pom.xml too.
There are two different ways that you can specify the use of multiple repositories. The first way is to specify in a POM which repositories you want to use
And according to Introduction to repositories, you can use the file:// protocol in <url>.
Remote repositories refer to any other type of repository, accessed by a variety of protocols such as file:// and http://.
So the following works:
<project>
...
<repositories>
<repository>
<id>example-repo</id>
<name>Example Repository</name>
<url>file://path/to/your/local/repository</url>
</repository>
</repositories>
</project>
Edit:
Based on your comment and edit, you need to override the default repository and Maven home directory in pom.xml.
I've found a topic about disabling central repository, and tried out the answers, but Maven still uses the values from settings.xml. This answer in another thread explains why:
settings.xml allows you to override definitions in pom.xml, not the other way round.
So it's seems it is not possible to override the default mechanism from pom.xml, Maven will search for dependencies in repositories configured in settings.xml and will install to Maven home specified in that file.

If the problem is having to write the options every time when running maven, you can use a feature available since version 3.3.1 that allows you to set command line options in your project (or parent project of your module). Read #Brice's answer: https://stackoverflow.com/a/48583079
So with this feature in mind, you can achieve a similar result by setting up a new settings.xml with the <localRepository> pointing to the location you desire and use maven.config in your project to make maven use the new settings.xml, which by the way can be anywhere you want.

In maven how to add a local maven project as a dependency with source code

https://github.com/OhadR/Authentication-Flows
The client project has a dependency
<dependency>
<groupId>com.ohadr</groupId>
<artifactId>authentication-flows</artifactId>
<version>${ohadr.flows.version}</version>
</dependency>
Which is fetched from online maven repository. The source code for this depdency is here.
I want to make changes in this source code and use that source code as dependency for the client project.
How do I authentication-flows maven project as a dependency in the client application instead of fetching from online maven repo?

Take a look into this answer:
<repository>
<id>central</id>
<url>http://repo1.maven.org/maven2</url>
<updatePolicy>never</updatePolicy>
</repository>

There are several ways how you can do this.
If your change is a bugfix or a useful feature consider making a pull request to the original project. In order to do that, fork the repository in GitHub, make your changes and create pull request. If this pull request is approved you'll eventually have your changes in central repo. However, this approach will require some patience.
You can fork the project, make the changes, rename the group/artifact (if license permits), build it and deploy artifacts to the local/private repository (mvn install/deploy). Then you can add this repository along with corresponding new dependency to your target project.
(undesirable approach) You can fork project, make changes, build it and include target jar in your project as maven system scope dependency.

You have all the answers in the README files: it states clearly that the project itself is here. So you can clone it, change whatever you need, build, and use it in your client project.
HTH.

Maven dependency issue - artifact not found in central repo

I'm trying to build the project from this site http://www.joptimizer.com/usage.html. I downloaded the sources jar file, unpacked it and ran maven package in the root folder. Maven fails at the last minute saying it couldn't resolve the dependency..
could not find artifact seventytwomiles:architecture-rules:jar:3.0.0-M1 in central repo - repo.maven.apache.org/maven2 ..
I have a feeling I might need to change something in the pom.xml file for this to work, but have no idea what. Googling for this missing dependency lead me no where. In general, how would one know what to do to handle such errors (and also please help with this specific case).

Specifically
According to the Building notes on http://www.joptimizer.com/usage.html:
JOptimizer is build on maven 3.0. Before building it, you must resolve
(in pom.xml) the external dependency on Colt and other dependencies
that aren't in public repositories. Please refer to the "Dependencies"
report for a complete treatment. For ease of use a boundle with
these external libraries is provided (visit "Download"): extract the
boundle in a folder and run the "maven-install.cmd" (translate it in
your own shell language), and you will get the artifacts in your local
repository.
To get the bundle for this, go to http://sourceforge.net/projects/cvxopt/files/, and download the appropriate version of joptimizer-3.X.X-dependencies.zip. Unzip in your own folder, and run mvn install:install-file -DgroupId=seventytwomiles -DartifactId=architecture-rules -Dversion=3.0.0-M1 -Dpackaging=jar -Dfile=architecture-rules-3.0.0-M1.jar -DpomFile=architecture-rules-3.0.0-M1.pom
Generally
Use a tool like http://mavenrepository.com to search for another version of the missing dependency and update your POM with the proper version. If MVNRepository doesn't know about it, you can install the dependency yourself. If you are working with a group of developers, as Eric Jablow mentions, an artifact repository like Nexus or Artifactory is great for sharing non-public dependencies. If it's just you, you can install the artifact in your local repo as described here: How to manually install an artifact in Maven 2?

You should add your own repository manager like Nexus or Artifactory. Then, find out where this dependency is kept; there are repositories other than central. If it's kept on another repository, have your repository mirror that too.
Otherwise, Nexus or Artifactory have commands to enter the dependency manually. Create a local repository called "Third-party" and add it there.
Finally, change your settings.xml file to refer everything to your repository manager.
The most common case for this is when a company refuses to license their products to be held at the central repository. For example, Microsoft won't let its sqljdbc.jar file be distributed through Central. So, you need to add it by hand.

Change the dependency as follows
<dependency>
<groupId>org.architecturerules</groupId>
<artifactId>architecture-rules</artifactId>
<version>3.0.0-rc1</version>
<scope>test</scope>
</dependency>
Add the repository in pom
<repositories>
<repository>
<id>architecturerules.googlecode.com</id>
<url>http://architecturerules.googlecode.com/svn/maven2/</url>
</repository>
</repositories>

Maven: Add local dependencies to jar

I have a dependency
<dependency>
<groupId>de.matthiasmann</groupId>
<artifactId>twl</artifactId>
<version>1.0.0</version>
<scope>system</scope>
<systemPath>${project.basedir}/lib/TWL.jar</systemPath>
</dependency>
Then I execute mvn assembly:assembly. All natives files and remote maven libs are added, but there is no this jar.
UPDATE
When I am trying to run app by java -jar myjar.jar. It returns an error that there is no class from the above dependency (NoClassDefFoundError : de.matthiasmann.twl.ForExample).
I want to add classes from this jar to myjar.jar (the same what maven does with remote dependencies). How I can configure maven to do that?

See Maven 2 assembly with dependencies: jar under scope "system" not included for why system dependencies are not included and how you can work around it, specifically the mvn install:install-file code is what you want.

You cannot use systemPath, unless your Java EE server/container has that jar configured.
Remember that maven is development and compile time only. Once the war file is built, maven has no effect except for having placed all the desired jars into the WEB-INF/lib folder.
When you specify system scope, it means that it is your responsibility to ensure that the jar is present when the war is deployed. You already have a framework to do that and you do not wish to encumber your build dependency with that jar, but you have to make it available thro Maven only during development.
The other similar scope is "provided". e.g., JBoss or your corporate common deployment Tomcat framework already provides many of the jars like Spring and Hibernate that are loaded by the server startup and common to all apps in the server. Therefore, you would not want maven build to include those into the war file.
The right way, Maven gurus would tell you. is to have your own maven server and build whatever artefacts you need into that server. However, occasionally that is not possible.
Therefore, on such occasions, I create project level repository that is distributed with the project and checked into version control. I run the command mvn install to create a project level directory called, say, "project-repo".
http://maven.apache.org/plugins/maven-install-plugin/examples/specific-local-repo.html (Due to familiarity, most of the time, I build the repo by hand rather than run mvn install).
Then in the POM, I specify file://${project.basedir}/project-repo as one of the repositories. The caveat with this is that in Windows, the slashes other than the pair after "file://" has to be back-slashes when referring to Windows file system paths.
<repositories>
<repository>
<id>my-repo1</id>
<name>my custom repo</name>
<url>http://ho.ho.ho</url>
</repository>
<repository>
<id>project-repo</id>
<name>my project repo</name>
<url>file://${project.basedir}\project-repo</url>
</repository>
</repositories>

YOu can implement this in many ways refer the blog below
http://blog.valdaris.com/post/custom-jar/

If you have such an dependency the best solution is first to use a repository manager and simply put that dependency into the repository manager and afterwards use it as simple dependency.

Include a Maven dependency only if it exists

I have a problem, I have a project which is based in a system that includes modules. This modules are other maven projects and are referenced from system POM. My problem is I'm sharing the system project with a workmate and we've got different modules.
So, is there a way to tell Maven that I want to include a module referenced in my POM only if this module exists? I mean, without compilation failure.
Thanks!

I would suggest to use profiles and activate them on file/exists option.

Use dependencyManagementis to pull all the dependency information into a common POM file, simplifying the references in the child POM file.

There are several solutions, depending on what you can do/want to achieve.
One approach is to install a Maven repository server at your company (in your local LAN or in a LAN that you and your colleague share). Build the system and then deploy the modules to the server.
In your build, you can add this new server like this (documentation):
<project>
...
<repositories>
<repository>
<id>my-internal-site</id>
<url>http://myserver/repo</url>
</repository>
</repositories>
...
</project>
Or you can both copy the base system and build it locally with mvn install. That will copy all artifacts into your local cache.
From there, you can reference them as usual. You don't need to include all the modules; just the ones you really need. That way, you and your friend don't have to use the same dependencies.