Tell him! If you don't give it a try, you'll kick yourself later. You'll regret it forever, not knowing what could have been. It's better to risk it, and ending up looking like a fool, rather than playing it safe and wondering what could have been =D
Hm... I'm not too sure. If he says he couldn't see you two dating then it may be pointless; however, how many times have you bent the truth to someone? I think if you like him enough to go for it but if he doesn't feel the same then be supportive of him and her and be a good friend to him instead.
Hiya, I`m Ari! Your friends are definitely right. Tell him! You have one chance to make this work, because if you DON'T interfere, he'll for sure know you`re not interested. Be brave! If you died tomorrow, he`d never know that you'd liked him. ;3
One other thing; Tell him in person, above all else. It's going to be awkward, but it's the right way to go.
It's better to risk it, and ending up looking like a fool, rather than playing it safe and wondering what could have been =D