Demo Doc
Example Document

You can only embed images directly in New Sites. To insert documents you can upload them to Google Drive, share them publicly* and insert them using the From Drive option in the INSERT menu.  

See also a PDF example

Here are some more detailed instructions from sites guru Steegle: 

*You can also publish the document in order to embed it into your site. See this information from a docs help file:

To make a document, spreadsheet, or presentation, available for a large audience to see, publish a file. After you publish your file, you’ll have a URL that you can send to anyone or embed into your website.


Sites and Files Access Control From Perjury's site

Users with files on Google Drive that embed them in a Google Site frequently ask why their files are not visible on their Site.

The sharing settings for files in Drive are separate from the Site sharing settings and need to be set separately - usually to be the same as the Site - they are not 'inherited' from the Site they are shared in.

If you have several files to insert you can create  folder in Drive, share it appropriately and place your files in that folder.

In the first file below I have disabled  the download capability. See the instructions here: