Edit in JSFiddle

<svg id="svg-image-blur">
    <image x="10" y="10" id="svg-image" width="300" height="200" xlink:href="http://css-plus.com/examples/2012/03/gaussian-blur/i/fence.jpg" />

    <filter id="blur-effect-1">
        <feGaussianBlur stdDeviation="2" />
    </filter>
</svg> 

#svg-image-blur { height: 220px; width: 320px; }
    #svg-image:hover { filter:url(#blur-effect-1); }