Combine 2 cups of the flour, 1/2 cup of the granulated sugar, the yeast, and salt; set aside. In a saucepan combine water, milk, and the 1/2 cup butter. Heat and stir just until warm (120 degree F to 130 degrees F) and butter is almost melted. Add to flour mixture; add egg. Beat with an electric mixer at low speed for 30 seconds, scraping bowl constantly. Beat for 3 minutes at high speed. Using a wooden spoon, stir in as much of the remaining flour as you can.

Turn dough out onto a lightly floured surface. Knead in enough of the remaining flour to make a moderately stiff dough that is smooth and elastic (6 to 8 minutes total). Shape into a ball. Place in a greased bowl. Cover; let rise in a warm place until double (about 1 hour). Punch down. Turn out onto a floured surface. Divide in half. Cover; let rest for 10 minutes.

For filling, combine the cream cheese, lime peel, 2 tablespoons of the lime juice, and 1/2 cup of the remaining granulated sugar. Set aside.

For icing, combine the powdered sugar, the remaining 1 tablespoon lime juice, and the melted butter or margarine. Set aside.

On a floured surface, roll each portion of dough into a 14x9-inch rectangle. Sprinkle each with 1/4 cup of the remaining granulated sugar. Starting from a long side, roll up jelly-roll style. Cut into 12 slices; arrange slices 2 inches apart on a lightly greased baking sheet. Make indentations in centers; fill each indentation with a scant tablespoon of the filling. Repeat with remaining dough, sugar, and filling.

Bake in a 375 degree F oven for 18 to 20 minutes or until golden. Let stand 2 minutes; drizzle with icing. Serve warm. Makes 24 pastries.

Prepare dough; cover tightly and chill overnight. Prepare filling; cover and chill up to 12 hours. Assemble as directed.