I would suggest that you try MPEG Streamclip, which is free. You can get it here.
http://www.squared5.com/svideo/mpeg-streamclip-mac.html
Drag your MPG clip into MPEG Streamclip. Then use FILE/EXPORT TO QUICKTIME Choose Apple Intermediate Codec for compression. This will produce a MOV file that you can use in iMovie.
By the way, if your camera makes MPG files, it is digital, not analog. MPG was used for some older standard definition digital camcorders.
There is a chance you will need to purchase an extra component. MPEG Streamclip will tell you if that is so.
I think it is unlikely in your case. In any event the extra component can be purchased from Apple for about $20.
It is the Apple QuickTime MPEG2 Playback Component.