Preheat oven to 350°F Cream butter and sugar in large bowl until blended.
Beat in egg yolks, vanilla, baking powder and salt until light.
Stir in flour to make a stiff dough.
Divide dough into 3 equal parts; place each part in small bowl.
Add cherries and walnuts to one part, blending well.
Melt chocolate chips in small bowl over hot water.
Stir until smooth.
Add melted chocolate and 1 teaspoon of the water to second part, blending well.
Stir remaining 1 teaspoon water into third part.
Divide each color dough into 4 equal parts.
Shape each part into a 6-inch rope by rolling on lightly floured surface.
Place one rope of each color side by side on ungreased cookie sheet.
Flatten ropes so they attach together making 1 strip of 3 colors.
With rolling pin, roll strip directly on cookie sheet until it measures 12X3 inches.
With straight edge of knife, score strip crosswise at 1-inch intervals.
Repeat with remaining ropes to make a total of 4 tri-colored strips of dough.
Bake 12 to 13 minutes or until set but not completely browned; remove from oven.
While cookies are still warm, trim lengthwise edges to make them even and cut into individual cookies along score marks.
Cool on cookie sheets.