This should do the trick:
echo $html->image('image.png', array('url' => '/' . IMAGES_URL . 'image.png'));
you can also do this in 1.2
echo $html->link(
$html->image('img.png'),
'img.png',
array(),
null,
false
);
or in 1.3
echo $html->link(
$html->image('img.png'),
'img.png',
array(),
array( 'escape' => false ),
);