Heat oven to 325 degrees F.
In small bowl, combine 1 tablespoon grated orange peel and 1/4 cup orange juice; set aside.
In large bowl, cream 3/4 cup softened margarine or butter, 1 tablespoon water and 1 teaspoon vanilla extract. Gradually stir in contents of jar; mix well. Shape dough into 1-inch balls. Place 2 inches apart on ungreased cookie sheets. Bake for 15 to 20 minutes or until firm to touch. Remove from cookie sheets; cool completely.
Strain orange juice mixture. Dip cookies in orange juice, then roll in granulated sugar. Allow to dry to form sugar shell.
Makes 3 1/2 dozen cookies.