This exercise can be done without a leash in an enclosed safe area. Luring teaches your puppy to focus on you and sit when you stop.
If the puppy is jumping up, then you are holding the treat too high. Your arm should hang naturally by your side. For a tiny pup such as a toy breed, you will need to bend down to make sure your pup is staying focused on the treat. Or, use a wooden spoon with a sticky treat, such as peanut butter, to avoid having to bend over.
Proceed in baby steps for all the obedience exercises. Once the pup is walking for a short distance nicely and you are feeling comfortable with what you need to do, you can start to cover more ground, change directions and change your pace. Remember to stop often and lure the pup to sit or down. Remember to break often (release the puppy) from the luring and enjoy a quick game (see Games).