You're going to need:
A kitchen towel
2 pieces of fabric, same width as the towel. As for length - I used 10 cm (around 4")
2 pieces of lace, same width as the towel
Sewing machine (you can sew it by hand as well, but it'll take more time to make)
Fold 1 cm of all edges of one piece of fabric towards the wrong side and iron. Do the same with the other piece of fabric.
Place the first piece of fabric on one side of the towel, where you want it to be, and pin it on the bottom and both sides. Now turn over and place the second piece of fabric on the other side of the towel, exactly behind the first piece and pin it too (if you place the towel flat on the floor with the first side you did touching the floor, you'll be able to feel the edge and pin the second piece exactly where it should be). Place the lace on top and pin. Do the same on the other side.
Sew along the circumference. It's best to use white thread for the top part (the lace) and a thread the same color of the piece of fabric for the rest.
That's it, you're done. It was simple, wasn't it? The only tricky part is to lay both pieces of fabric in the same place on both sides of the towel. Here's the second towel I made:
And both together
And right before they moved to their new home