Combine first 3 ingredients; cover and chill 30 minutes. Place watermelon mixture in container of an electric blender or food processor. Top with cover, and process until smooth; set aside. Sprinkle gelatin over water in a small sauxepan; let stand 1 minute. Cook over medium heat, stirring until gelatine dissolves; remove from heat. Combine watermelon mixture, gelatin and milk. Pour into freezer container of a 5-quart hand-turned or electric freezer. Freeze mixture according to manufactuer's instructions.