Preheat the oven to 350°F. Grease and flour a 9-inch round cake pan. In a large mixing bowl, cream the butter and sugar until light and fluffy. Add the eggs one at a time, beating well after each addition. In another bowl, sift together the flour, baking powder, baking soda, and salt. Gradually add the dry ingredients to the wet mixture, alternating with lime juice and milk until combined. Pour the batter into the prepared pan.

Bake in the preheated oven for 30-35 minutes, or until a toothpick inserted into the center comes out clean. Remove from the oven and allow the cake to cool in the pan for 10 minutes before transferring to a wire rack to cool completely.

In a small saucepan, combine lime juice, water, and sugar. Sprinkle gelatin over the mixture and let stand for 5 minutes to bloom. Heat over medium-low heat, stirring constantly until the gelatin and sugar are completely dissolved. Remove from heat and let cool slightly.

Once the cake has cooled, pour the lime jelly mixture evenly over the top of the cake while still in the pan. Refrigerate the cake for 2-3 hours, or until the jelly is fully set.

Remove the cake from the pan carefully. Arrange the halved cherries on top of the jelly layer for decoration. Serve the cake chilled.

Slice the cake into portions and serve chilled. Pair with a light beverage like iced tea or sparkling water with lime.

Store any leftovers in an airtight container in the refrigerator for up to 3 days. The cake is best served cold.