Let eggs stand at room temperature for 30 minutes. In a large mixing bowl, combine the flour, sugar, baking powder and salt. In another bowl, whisk the egg yolks, water, oil, lemon peel and vanilla; add to dry ingredients. Beat until well blended.
In another large mixing bowl, beat egg whites and cream of tartar on medium speed until soft peaks form; fold into batter. Gently spoon into an ungreased 10 inch tube pan. Cut through batter with a knife to remove air pockets.
Bake on the lowest oven rack at 325 for 50-55 minutes or until top springs back when lightly touched. Immediately invert the pan; cool completely, about one hour.
Run a knife around side and center tube of pan. Remove cake to a serving plate. In a small mixing bowl, combine frosting ingredients; beat until smooth. Spread over top of cake.