If processing in a water bath for shelf stable jelly, put on a very large pot (21-quarts) of water to boil. Not necessary if storing jelly in fridge or freezer.
Wash jars with hot soapy water. For shelf stable jelly, sterilize the jars.
Wearing kitchen gloves, remove stems and seeds from jalapeno (and bell pepper, if using) peppers. Chop the peppers with a knife or pulse in a food processor in batches.
Combine peppers, sugar, and vinegar in a pan no smaller than 6- to 8-quarts. Bring to a boil, gently stirring occasionally. Boil at a rolling boil for 3 minutes.
Meanwhile, peel and chop peaches. Peaches are added later to hold their shape.
After pepper mixture has boiled 3 minutes, stir in peaches. Bring back to a boil and boil for 2 minutes.
Meanwhile, in a small saucepan, stir together powdered pectin and water. Bring to a boil and boil 1 minute. Try to time this so it is ready when the peach mixture has boiled 2 minutes.
Stir cooked pectin mixture into the peach mixture. Bring to a boil and boil 1 full minute.
Remove the peach-pepper mixture from the heat and skim off any foam that may appear.
Fill jars with hot jelly mixture. Wipe rims of jars clean. Seal lids with jar rings.