Preheat the oven to 325 degrees F (165 degrees C).
Melt butter in a heavy skillet over medium heat. Add the onion and rice; cook and stir until lightly toasted. Stir in the water and lemon juice, and season with salt and dill seed. Bring to a boil. Pour the rice mixture into a 3 quart casserole dish.
Bake for 1 hour, covered, in the preheated oven. Garnish with lemon zest and chopped parsley.
