What's the difference between "jelly" and "jam"?

Wikipedia explains that the difference between jam and jelly is that jam uses whole pieces of fruit, while jelly uses the juice:

Properly, the term jam refers to a product made with whole fruit, cut into pieces or crushed...
Jelly is a clear or translucent fruit spread made from sweetened fruit (or vegetable) juice and set using naturally occurring pectin.

There is a difference. Jam in the UK, is what Americans call jelly. Jelly in the UK, is what Americans call "Jell-O".

The main difference, is how to use these words. Consider who you are talking to, to ensure that you make your meaning clear.

If you are talking to a British person and mention jelly, they will think of what Americans call "Jell-O". If you ask for jelly in the UK, you will end up with "Jell-O".

If you mean what Americans call jelly, you will need to use the word jam.

Otherwise, this can lead to a misunderstanding.

These pages explain it: http://dictionary.cambridge.org/dictionary/british/jelly?q=jelly and http://dictionary.cambridge.org/dictionary/british/jam_1?q=jam

Typically, jam has chunks of fruit left in it while jelly does not. Think of it like the difference between chunky and non-chunky peanut butter.