In a large bowl, mix together ground beef, milk, and bread crumbs. Season with cloves, allspice, salt, and pepper. Shape into 1 inch balls.
Heat oil in a large heavy skillet over medium heat. Cook the meatballs until evenly brown; drain excess fat. Stir in water, vinegar, brown sugar, ginger, and bay leaf. Cover, and simmer for 30 minutes. Skim off any fat. Transfer meatballs to a serving dish, and keep warm.
Combine flour with 2 tablespoons of water, and whisk into pan. Cook, stirring constantly, until thickened. Pour gravy over meatballs.