Make the Syrup: Combine the water, sugar, honey, cinnamon stick and orange peel in a small saucepan and bring to a boil over medium-high heat. Reduce the heat to low and simmer for 15 minutes. Remove from the heat and let cool to room temperature.
Make the Baklava: Preheat oven to 350 degrees F.
Place the walnuts, cinnamon and cloves in a food processor and process until the walnuts are finely ground.
Melt the butter in a small saucepan over very low heat, keeping it warm throughout the process so it doesn't start to solidify.
Brush a 9×13-inch pan with melted butter and place one layer of phyllo at the bottom. Brush the phyllo with the melted butter, and then add another layer of phyllo, and brush with more butter. Continue this process until you have layered 7 sheets of phyllo.
Gently spread one-quarter of the nut mixture evenly over the top of the phyllo. Repeat the process of layering phyllo sheets and brushing with melted butter, but this time use only 5 sheets of phyllo. Gently spread another one-quarter of the nut mixture over the top of the phyllo. Repeat this twice more, layering and buttering 5 sheets of phyllo and topping with one-quarter of the nut mixture. Finish off with 7 layers of buttered phyllo. Brush the top sheet with melted butter, as well.
Using a sharp knife, trim any ragged pieces of phyllo dough that has crept up the sides of the pan. Cut the baklava into 12 even squares, and then cut into triangles (you should have 24 triangles). Place the pan in the oven and bake until golden brown, about 50 minutes.
As soon as the baklava comes out of the oven, remove the cinnamon stick and orange peel from the syrup and slowly pour it over the hot baklava, making sure to get it into all of the cracks and crevices, as well as on the top surface. Allow the baklava to sit for at least 4 hours before serving so the syrup has a chance to soak in. (The baklava is actually best when left to sit overnight before serving.) Baklava can be stored at room temperature, covered very loosely with a paper towel or foil until ready to serve. Leftovers should be stored in airtight container at room temperature or in the refrigerator for up to 2 weeks.