Rinse ham slices in warm water; dredge in flour, reserving 2 tablespoons for gravy. Fry ham slices in hot oil in a large skillet over medium heat 4 minutes on each side or until golden brown. Drain well; reserve 2 tablespoons oil in skillet.
Add reserved flour to skillet; cook over medium heat, stirring constantly, 2 to 3 minutes or until flour is lightly browned. Gradually add milk; cook until thickened and bubbly. Stir in salt and pepper. Serve ham with gravy.