The stars twinkling in the night sky looked like jewels.
Literal
Night-sky [in-に] kirakira is-shining-[ている] star [topic-は], jewel [like-のように] was-visible-[polite past-ました].
~のように ('like, as if') is the comparative/simile marker. Literally 'in the manner of X.' Here, the stars 'looked like jewels.' 見える here has its secondary sense of 'appear, look like' — common with のように, のような. A classic simile construction.