1In a bowl, combine onion, crumbs, and Parmesan cheese. Crumble beef over mixture and mix well. Shape into 1" balls; place on a rack in a shallow baking pan. Bake at 400* for 15-20 minutes or until no longer pink.
2Meanwhile, arrange bread in a single layer in an ungreased 13"x9"x2" baking dish. Combine the cream cheese, mayonnaise, Italian seasoning, and pepper; spread over the bread.Sprinkle with 1/2 cup mozzarella.
3Combine the sauce, water, and garlic; add meatballs. Pour over cheese mixture; sprinkle with remaining mozzarella. Bake, uncovered, at 350* for 30 minutes or until heated through.