In a large bowl, sprinkle gelatin over 1/2 cup cold water; let stand 5 minutes. Meanwhile, bring sugar and remaining 1 cup water to a boil in a small saucepan; stir until sugar is dissolved. Pour over gelatin mixture; stir until it is dissolved.
Stir in peach juice, and pour mixture into an 8-inch square cake pan. Place in refrigerator until it is set, at least 3 hours or overnight. Cut into 1-inch cubes; serve.
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