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Step 1
Mix cream cheese and butter until smooth. Add flour slowly until well blended. Shape into a ball and chill overnight or for several hours.
Step 2
Preheat oven to 350 degrees F (180 degrees C).
Step 3
Roll dough out 1/8 inch thick on a floured pastry board. Cut into 2 1/2 inch squares and place about 1/2 teaspoon jam or preserves in the center. Overlap opposite corners and pinch together. Place on ungreased cookie sheets.
Step 4
Bake for 10 to 12 minutes in the preheated oven. Cool on wire racks. Sprinkle kolacky lightly with confectioner's sugar.