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1. Preheat oven to 325 degrees F. In a medium bowl combine flour, nuts, the 3 tablespoons sugar, and the lemon peel. Using a pastry blender, cut in butter until mixture resembles fine crumbs and starts to cling together (dough will still be crumbly). Knead until smooth; form into a ball.
2. On a lightly floured surface roll dough until 1/2 inch thick. Using 1-1/2-inch to 3-inch cookie cutters, cut into desired shapes. (Or roll into 1-inch balls.) Place 1 inch apart on an ungreased cookie sheet. Sprinkle with additional sugar.
3. Bake for 18 to 20 minutes for small cookies or 20 to 22 minutes for large cookies or until bottoms start to brown and centers are set. Transfer to wire racks; cool.