Wash 5 half pint jars in soapy water; let them air dry on a clean towel.
Wear gloves when handling jalapeno peppers and do not touch your face or eyes. Cut the peppers in half and remove seeds and white membrane from the jalapeno and bell peppers.
Cut peppers into approximately 1 1/2-inch pieces. This will help the food processor mince the peppers evenly. (You can also just mince the peppers with a chef's knife and skip the food processor.)
Pulse the pepper pieces 3 or 4 times in the food processor or blender or just until minced. Do not puree!
Add the minced peppers, vinegar and sugar to an 8 quart pot or large saucepan. Stir well and let it stand 10 minutes, stirring occasionally.
Meanwhile, combine pectin and water in a small saucepan. Bring to a boil over medium heat, stirring constantly. Boil 1 minute.
Gradually add cooked pectin liquid to the pepper mixture in the pot, stirring well. Bring to a boil and boil 1 minute, stirring often.
Remove the pan from the heat and skim any foam from the top, if there is any.
Stir in a couple of drops of food coloring, if desired. You can also divide the hot mixture into two pans and put one or two drops of red food coloring in one pan and one or two drops of green in the other to get half red and half green liquid.The red and green peppers is pretty as it is without any extra coloring, too. Using a canning funnel, or very carefully, pour pepper mixture into washed Mason jars or 1-cup freezer containers.
Cover with the lids and screw on the bands. Let stand at room temperature 24 hours to fully set up. Serve immediately or refrigerate up to 1 month or freeze up to 1 year.