In a blender, combine the watermelon and water. Blend and pulse quickly, until just the watermelon has broken down – this should take about 60 seconds.
Pour mixture through a fine mesh strainer into a large bowl to remove the seeds.
Return the strained watermelon juice to the blender and add the condensed milk. Blend until smooth. Pour the mixture into the molds.
If using cups, you’ll need to insert wooden popsicle sticks. Freeze for about 4 hours, or until firm.