In a medium bowl beat butter medium speed for about 30 seconds. Add the the 2/3 cup granulated sugar and 1/2 teaspoon almond extract. Beat until well combined. Beat in as much flour as you can with electric mixer and then using a wooden spoon stir in any remaining flour. Cover and chill for 1 hour or until dough is easy to handle.
Preheat oven to 350 degrees. Shape dough into 1-inch balls. Place balls 2 inches apart on ungreased cookie sheets. Using your thumb, press an indentation into the center of each ball. Spoon about 1/2 teaspoon of the jam into each indentation and then sprinkle with sugar. Bake about 10 minutes or until edges are light brown. Cool on cookie sheets for 1 minute. Transfer cookies to wire racks to finish cooling.
For icing, in a medium bowl combine powdered sugar, 1 teaspoon water and 1 1/2 teaspoons almond extract. Add enough of the remaining water to make a drizzling consistency. Drizzle cookies with icing.