In a large bowl, cream butter and sugar until fluffy. Add jelly and vanilla; beat until well blended. Add flour; stir until a soft dough forms. Cover and chill 30 min.
Preheat oven to 300º. Grease a baking sheet.
On a lightly floured surface and using a floured rolling pin, roll out dough to ¼” thick. Using a 3” cookie cutter to cut out cookies into desired shapes. Transfer to the prepared baking sheet and bake 20-25 min or until cookies are lightly browned. Transfer to wire racks to cool completely.
Make icing by combining confectioners sugar, milk, and lemon extract in a large bowl. Stir until smooth, ice cookies.
Allow icing to harden, store in airtight container.
Decorating Examples: use a 3” wreath ,using green decorating icing with a leaf tip; pipe leaves onto cookies and decorate with dragees.
Christmas Trees: use a 3” Christmas tree cookie cutter, using red and green decorating icing, and the rope tip, go from leaf to leaf crisscrossing with both green and red, using dragees as bulbs.