In a large mixing bowl, combine flour, butter and 1-1/2 cups sugar. Beat egg yolks;add to mixing bowl along with milk and lemon peel. Mix well. Add lemon juice. In another bowl, beat egg whites until stiff, slowly adding remaining 1/2 cup sugar while beating. Fold into batter. Pour into a greased 2-qt. Baking dish or individual ramekins. Place in a shallow pan of hot water and bake at 350! for 55-60 minutes or until lightly browned. Serve warm or chilled with confectioners' sugar dusted on top.