Spaghetti with Italian Meatballs

"Sharon Crider sends this hearty spaghetti dinner from Junction City, Kansas. "It's one of my family's favorite recipes," she writes. "We enjoy servings of the sauce with a variety of pasta."..."

INGREDIENTS
3/4 cup chopped onion
1 tablespoon olive oil
1 garlic clove, minced
1 can (28 ounces) Italian crushed tomatoes, undrained
1 can (6 ounces) tomato paste
1 cup water
1-1/2 teaspoons dried oregano
1/2 teaspoon salt
1/2 teaspoon pepper
MEATBALLS:
4 slices white bread, torn
1/2 cup water
2 eggs, lightly beaten
1/2 cup grated Parmesan cheese
1 garlic clove, minced
1 teaspoon dried basil
1 teaspoon dried parsley flakes
1/2 teaspoon salt
1 pound lean ground beef (90% lean)
2 teaspoons olive oil
1 package (16 ounces) spaghetti
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