In a medium size pan, add the water, sugar, zest and juice. Heat the pan on low to medium heat. Stir while it's cooking; let cook until the sugar is completely dissolved. Add the cranberries and stir.
Cook for another 10 minutes and then turn the heat down to the lowest setting. If the cranberries aren't opening up, turn the heat up to the medium setting.
Cover the pan and let simmer for another 15 to 20 minutes or until the desired thickness is reached. Stir occasionally. The sauce will thicken as it simmers. Remove from the stove and let cool.
Serve chilled or warm.