To make yeast dough, stir 1 teaspoon sugar into warm milk and sprinkle with yeast.
Let stand 5 minutes or until frothy.
Stir gently to moisten any dry particles remaining on top.
Sift flour and salt into a large bowl.
Melt butter; cool slightly.
In a medium bowl, mix butter, remaining sugar, orange and lemon peel and eggs.
Stir in yeast mixture.
Beat into flour mixture to make a smooth batter.
Cover and let stand in a warm place 30 minutes.
Grease and flour two 7-1/2 cup (1.75-liter) savarin or tube molds.
Beat raisins into batter.
Divide batter between prepared pans.
Cover and let rise in a warm place until batter is 1 inch (2.5 cm) from top of pans.
Preheat oven to 375°F (190°C).
Bake cakes 50 minutes or until a skewer inserted in cakes comes out clean.
Cover cakes with a little foil during cooking if they are becoming too brown.
Cool in pans 20 minutes, then turn out onto racks to cool completely.
To make frosting, combine powdered sugar, lemon juice and water in a small bowl.
Pour over cooled cakes; decorate with halved cherries while frosting is soft.