Drop peaches in boiling water for 1 minute or until peel has softened. Immediately dip fruit in ice water. Peel and chop peaches.
In a large saucepan, combine the peaches, sugar and lemon juice. Bring to a boil. Mash peaches. Reduce heat; simmer, uncovered, for 5 minutes.
Meanwhile, in a small bowl sprinkle gelatin over cold water; let stand for 2 minutes. Remove peach mixture from the heat; stir in gelatin mixture until dissolved. Cool for 10 minutes. Pour into jars. Refrigerate for up to 3 weeks.