In medium bowl, mix all ingredients except cranberry sauce and water. Shape mixture into about 45 (1-inch) balls.
Heat 10-inch nonstick skillet over medium heat. Add meatballs; cover and cook 8 to 10 minutes, turning occasionally, until thermometer inserted in center of meatballs reads 165°F.
Gently stir in cranberry sauce and water. Reduce heat to medium-low; cook 3 to 4 minutes, stirring frequently, until cranberry sauce is melted and smooth.