Jam and jelly are both sweet fruit spreads thickened with sugar and pectin, but they differ in what part of the fruit goes into the jar. Jelly is made from fruit juice and sugar; it is clear and firm enough to hold its shape. Jam is made from crushed or chopped fruit and sugar, so it holds its shape too but is less firm and contains visible fruit pieces.
Related spreads use the same idea with different textures: preserves pack whole fruit or uniform pieces in a thick, slightly jellied syrup, and marmalades are soft jellies with small fruit pieces or citrus peel suspended throughout. These distinctions follow guidance from the National Center for Home Food Preservation (adapted from the USDA Complete Guide to Home Canning).