Dissolve gelatin in 2 tbsp cold water and let it swell for 5-10 minutes
In a medium saucepan, bring the cream, milk and sugar to a simmer over medium-low heat (do not boil). When sugar has dissolved, remove from heat and add vanilla extract. Let cool for 5 minutes before adding the gelatin.
Add gelatin into the milk mixture and stir until the gelatin has completely dissolved.
Pour mixture into serving glasses (smaller) or ramekins and refrigerate for about 4 hrs or overnight (until it sets).
To prepare the sauce, wash the strawberries, drain well and remove all leaves. Cut strawberries into quarters and put them in a small saucepan with sugar and water. Bring to a simmer and remove from heat immediately.
Using a blender or food processor, blend the mixture until it becomes smooth. Pass through a strainer to remove seeds.
Cover, let it cool to room temperature and then refrigerate. Pour strawberry sauce over the panna cotta when ready to serve.