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Jello contains 'gelatin' which is a fancy name for collagen. So I guess why jello is not considered vegetarian is because collagen is a structured protein that is obtained from animals skin, bones, and tendons. The gelatin in Jello comes from the collagen in cow or pig bones, hooves, and connective tissues.
You can buy jello/jelly that is made without the geletine. Vegan Store: Jelly Crystals
Look at the packets i know here in the uk if it is vegan/veggie safe it has a lil symbal of a leaf in a circle to say its safe.