Combine sugar and water in a medium saucepan; cook over medium heat 5 minutes or until sugar dissolves, stirring constantly. Remove from heat; stir in rind. Cool completely. Stir in vodka and lemon juice.
Sterilize 2 wide-mouthed, 1-quart jars according to manufacturer's directions. Divide vodka mixture between jars. Cover each jar with metal lid; screw on band. Store in a cool, dark place for 3 weeks, shaking jar every other day.
Line a fine-mesh sieve with a double layer of cheesecloth; strain mixture through cheesecloth into a bowl. Discard solids. Return liqueur to jars or clean decanter; store chilled in refrigerator or freezer.
Note: Mixture will keep in the freezer for up to a year.