Cream the butter until smooth, gradually adding the sugar. Fold in the flour, then gently stir in the nuts, water, and vanilla until well combined.
Form the mixture into bite-sized 1-inch balls, gently flatten each ball on an ungreased baking sheet, and press one whole clove into the center of each.
Bake at 350 degrees F (175 degrees C) for 20 minutes until golden. While warm, gently roll in confectioners' sugar and for extra sweetness, roll again once cooled.