RINSE clean plastic containers and lids in boiling water. Dry thoroughly.
MEASURE exactly 2/3 cup prepared peppers into large bowl. Add apple juice, vinegar and food coloring; mix well. Stir in sugar. Let stand 10 min., stirring occasionally.
MIX water and pectin in small saucepan. Bring to boil on high heat, stirring constantly. Boil and stir 1 min. Add to fruit mixture; stir 3 min. or until sugar is dissolved and no longer grainy. (A few sugar crystals may remain.)
FILL all containers immediately to within 1/2 inch of tops. Wipe off top edges of containers; immediately cover with lids. Let stand at room temperature 24 hours. Jelly is now ready to use. Store in refrigerator up to 3 weeks or freeze extra containers up to 1 year. Thaw in refrigerator before using.