Can I block all incoming UDP traffic via iptables?
Sure - but it will likely not do you any good.
Would this be effective against UDP ddos attacks?
Depends what the DDoS is hitting. From your other questions, it's clear that bandwidth is your concern; so, discarding the request once it's already hit your server will do you no good; especially since your current configuration is likely already discarding the packets immediately.
And if I can block all UDP traffic, would this cause any problems in linux?
Yes. UDP is a stateless protocol; blocking all traffic would block, for instance, inbound replies to DNS requests made by your server.
I continue to be unconvinced that this is a DoS at all (and it's clearly not a DDoS, as @joeqwerty pointed out); they're certainly exhausting your inbound bandwidth, but it may not be intentional or malicious.
The source of the traffic seems to be a legitimate data center; 126.96.36.199 is these guys (I'm assuming that those PTR records are legit, here - confirm that the source IP matches the PTR records), and they have a very clear policy about abusive traffic posted; if nothing else, you can contact their abuse address.
More to the point, the "attack" traffic looks to be fragmented UDP packets of exactly 8192 bytes - that strikes me as some kind of file transfer. Since you're running a web server, a far more effective (and far more common) DDoS strategy would be to use TCP connections on open ports, exhausting system resources without having to locally used as much upstream bandwidth as they're consuming of your downstream.
Can you look into what port they're sending data to? That may really shed some light on this issue.
Edit: I'm gonna guess NFS - port 2049.