Mix*, peanut butter, egg, water and vanilla in large mixing bowl. Stir until well blended. Form into 1-inch balls.
Roll in chopped peanuts.
Place 2-inches apart on cookie sheet.
Bake 8 to 10 minutes or until lightly browned. Using the rounded handle of wooden spoon, make an indentation about 1/2-inch wide in each cookie. Fill with 1/4 teaspoon jam. Cool completely on cooling rack.