Combine watermelon, sugar and lemon juice; refrigerate 30 minutes. Spoon half of mixture into blender container; process until smooth. Repeat with remaining watermelon mixture. Combine gelatin and cold water in a small saucepan; cook over low heat, stirring constantly, until gelatin is dissolved. Gradually add dissolved gelatin to watermelon mixture, stirring well. Add milk and pour into freezer can of a 1-gallon electric freezer. Freeze according to directions.