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1. For basil syrup, in a large saucepan combine water, sugar, and basil. Bring to boiling over medium-high heat. Reduce heat. Simmer, uncovered, for 20 minutes. Strain syrup and discard leaves. Cover and chill syrup for 2 to 24 hours.
2. For lemonade, in a very large punch bowl combine chilled syrup, club soda, and lemon juice. Serve over ice and garnish with jalapeno slices and fresh basil leaves.