In a medium bowl, beat the cream cheese with the butter at medium speed until smooth. Beat in the confectioners' sugar and lemon juice.
Put the water in a small heatproof bowl. Add the gelatin and let stand until softened, about 5 minutes. Place the bowl in a small saucepan of boiling water and stir just until the gelatin melts. Beat the gelatin mixture into the frosting and use right away.