You cannot do this without outside combustion air intakes. Code requires 50 cubic feet of space per 1000 btu/hour rating of your gas furnace and hot water heater. The lack of combustion air will cause a lack of complete combustion which will result in carbon monoxide being spread in the house, incomplete heating, and furnace failure. Your and your family's life would be in danger. Contact an HVAC serviceman before you do this.
Here is a web site that has info on the mechanical codes. Scroll down to furnace for clearances and then on down to combustion air for details. It is hard to understand unless you know what they are talking about to start with.