In a bowl, combine flour, nuts, sugar and lemon peel. Using a pastry blender, cut in butter until mixture resembles fine crumbs and starts to cling (dough will still be crumbly). Knead until smooth and form into a ball.
On lightly floured surface, roll dough until 1/2 inch thick. Using a 1-1/2-inch to 3-inch scalloped cookie cutter, cut into rounds. Place 1 inch apart on an ungreased cookie sheet.
Bake in a 325 degrees F oven for 18 to 20 minutes for small cookies or 20 to 22 minutes for larger cookies or until bottom starts to brown and center is set. Remove and cool on a wire rack. 20, 1-1/2-inch cookies or 5, 3-inch cookies