In 1-quart saucepan, heat sugar, water and mint over medium heat 3 to 4 minutes, stirring constantly, until sugar dissolves. Remove from heat.
In blender, place watermelon, lime juice and lime peel. Cover; blend until smooth. Add sugar mixture; blend again.
Pour mixture into 8-inch square pan. Freeze 1 to 2 hours, scraping with fork every 30 minutes, until all liquid has frozen.
Spoon evenly into 8 shot glasses. Serve.