Combine yeast and 1 teaspoon sugar in a small bowl. Let stand for 10 minutes. Combine milk and water in a pot; heat until lukewarm.
In a large bowl, combine flour and salt. Rub in butter with fingertips. Add yeast mixture and remaining sugar. Gradually add the warmed milk. Blend until the dough becomes elastic and starts to pull away from the sides of the bowl. Mix in the fruit and peel.
Turn dough onto a lightly floured board and knead until smooth and pliable. Dust inside of a warm bowl; place dough in it. Cover with a lightly floured clean towel. Leave in a warm place, about 100 degrees F., until doubled in bulk, about 1 1/2 hours.
Turn dough out onto lightly floured board. Gently knead; do not overwork. Cut dough into 6 even pieces. Shape into even, smooth rounds.
Place cakes onto a baking sheet and cover with a towel. Let rest another 30 minutes. Meanwhile, preheat oven to 450 degrees F. Once rested, bake cakes for 30 minutes.
To make glaze: dissolve 1/4 cup sugar in water over low heat. Brush over hot cakes. Cool and serve.
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