Preheat oven to 350 degrees F. Lightly grease 2 (9-inch) round cake pans.
In a large bowl, combine cake mix and gelatin. Add pureed strawberries, eggs, oil, and water; beat at medium speed with an electric mixer until smooth. Pour into prepared pans, and bake for 20 minutes, or until a wooden pick inserted in the center comes out clean.
Let cool in pans for 10 minutes. Remove from pans, and cool completely on wire racks.
For the frosting:
In a large bowl, beat butter and cream cheese at medium speed with an electric mixer until creamy. Beat in 1/4 cup of the strawberry puree and the strawberry extract. (The rest of the puree is leftover but can be used in smoothies or on ice cream for a delicious treat.) Gradually add confectioners' sugar, beating until smooth.
Spread frosting in between layers and on top and sides of cake. Garnish with sliced fresh strawberries, if desired.