In a food processor, combine peach slices, gelatin, lemon juice, and ascorbic powder; pulse process until peaches are finely chopped.
In a large bowl, combine sugar and fruit mixture; let stand 10 minutes. In a 1-quart microwave-safe bowl , combine water and pectin; microwave on high 2-2 ½ minutes or until mixture boils.
Microwave another 45 seconds; stir. Microwave 15 seconds longer; stir. Pour hot pectin mixture into fruit mixture; stir 3 minutes.
Pour into clean jars to within ½ inch of tops; wipe off rims of jars. Screw on lids. Allow jam to stand at room temperature for 24 hours; store in freezer.
Place in refrigerator 1 hour before serving. May be refrozen. Keep up tp 3 weeks in the refrigerator or up to 1 year in freezer.