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It depends on what you want to achieve?
Are you archiving your project or distributing your project?
If you are archiving your project then any thrid party compression tool can be used… however to achieve best results you should firstly create your JAR with no compression applied.
However if you wish to distribute your project then there are a myriad of programs to install your project.
If you are wanting to just distribute an executable JAR which is much better compressed using LZMA then you will need to use a tool similar to one which i have created in the past: http://www.java-gaming.org/index.php/topic,19177.0.html
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Jar files are already compressed (they are identical to zip files - rename a .jar to .zip for proof!) so if you have a huge jar file you must have huge code or huge resources. I guess the second one. Make sure your image and sound files are as small as possible (gif or jpg rather than png, 16khz mono rather than 44khz stereo sound &c…) then rebuild.
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well if you only have one monolithic JAR file and you sign your applet then you should be able to modify my executable JAR tool i made to work with applets.
If it is your resources which are taking up the space then i suggest programmatically lzma compressing each resource and then programmatically uncompressing the resource as needed.
You might look at pack200.
or combine pack200 with lzma to achieve very impressive results!