Wash, peel and cut up into small pieces enough nectarines to measure 4 cups. Sprinkle 1/4 cup sugar and the lime juice over the fruit; stir until the fruit is well coated with sugar. Set aside for at least one hour. In a small bowl, sprinkle the gelatin over the cold water; stir and set aside to soften. In a small saucepan, combine 1 cup water with 1/3 cup sugar. Bring to a boil over high heat, stirring. Lower the heat and keep at a slow boil for 5 minutes without stirring. Remove from the heat and pour in the softened gelatin; stir until the gelatin has melted. Set aside in the refrigerator to cool. Spoon the sugared fruit into a blender and blend until pureed; pour into a medium-sized bowl. Remove the sugar water from the refrigerator; pour into the fruit and stir until well combined. Cover and freeze for 1 hour, or until the mixture becomes icy. Remove from the freezer; uncover and stir to break up any icy pieces, then beat until smooth. Pour into a freezer container or serving dish. Cover and freeze until firm. Allow the ice to ripen in the refrigerator for 2 to 2 1/2 hours before serving. Makes 1 1/2 to 2 pints. Penny Halsey (ATBN65B).