Peel and slice peaches. Soften gelatin in water. Bring peaches and gelatin mixture to a boil; simmer about 15 minutes. Add lemon juice and extract, if desired. Put in jars; let set overnight. Keep refrigerated. Makes 2 pints.
Variation: Blueberry jam; use 2 cups berries, 1 cup water, 1 envelope gelatin, 2 teaspoon liquid sweetener and 1 to 2 tablespoons lemon juice. Follow method above. Yields about 1 pint.