What are jewels?
Watches have many moving parts, with wheels and pivots and shafts that can cause wear where they are held in place. So instead of metal moving against metal, which would cause friction and wear, watch makers designed jewels which cause very little friction or wear. The jewels can be made of diamonds, sapphires, or most commonly rubies, with a small hole drilled in them to hold the shaft of a pivot or wheel. More jewels are an indicator of watch quality, in general the higher the jewel count, the less wear and friction the watch will have, and the more accurate and long lasting the timepiece will be.
The ruby jewels in the movement below are set with gold screw down settings. You can see five jewels on this back side of the movement. Others are hidden inside.